(Alliance News) - Redx Pharma PLC on Friday said it has received two separate acquisition offers, one from new shareholder Redmile Group LLC and the second from former suitor Yesod Bio-Sciences Ltd.
Shares in Redx have multiplied to 13.48 pence each in morning trade Friday following the two bids. On Thursday, the stock ended at 4.50p.
The Macclesfield, England-based drug discovery company in February ended takeover talks with Yesod Bio-Sciences and instead inked a GBP26.3 million funding deal with two investors, US healthcare investor Redmile and Paris-based Sofinnova Partners.
Redmile had subscribed 11.5 million Redx shares, around 6% stake, at 11.2p, and also agreed to provide GBP5 million to Redx through a loan. In addition, Redmile and Sofinnova together committed to a further investment of about GBP20 million through a convertible loan.
On Friday, however, Redx said Redmile upped its stake in the company to around 46%, forcing Redmile to make a mandatory takeover offer under UK takeover rules.
Redmile had bought the additional 75 million Redx shares, a 39.5% stake, from Moulton Goodies Ltd at 15.5p per Redx share. As a result, Redmile made a mandatory cash offer for Redx shares not already owned at 15.5p each. Moulton Goodies was the largest shareholder of Redx, holding 42% as of January.
The Redmile merger offer represents a significant premium to the closing share price on Thursday, Redx noted. It values the entire Redx share capital at GBP29.5 million.
Redx said: "Following Redmile triggering the obligation to make the offer, Redmile is pleased to announce that the Redx directors intend to recommend unanimously that Redx shareholders accept the offer."
Separately, Redx also announced a receipt of a further private approach from Yesod Bio-Sciences which may lead to a possible cash offer for the company at 15p per share.
Redx, which is focused on cancer and fibrosis treatments, said it is giving a careful consideration to the Yesod Bio-Sciences approach, bearing in mind the commitments made in relation to funding from Redmile.
Yesod Bio-Sciences is controlled by Samuel Waksal, the founder of ImClone Systems Inc. Under UK takeover rules, it has until April 14 to make a firm offer for Redx, or walk away.
By Tapan Panchal; tapanpanchal@alliancenews.com
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