CPEX Pharmaceuticals, Inc. (NASDAQ: CPEX) today announced that
ISS Proxy Advisory Services (ISS), a leading independent proxy
advisory firm, has recommended that CPEX stockholders vote "FOR"
CPEX’s proposed merger agreement with FCB I Holdings Inc. (FCB),
under which CPEX stockholders will receive $27.25 per share in
cash. The transaction price represents a 142% premium over the
price of CPEX shares on January 7, 2010, the day prior to the date
a third party publicly stated its intention to make an unsolicited
offer for the Company, and a premium of approximately 12% over the
60-trading day average closing price of CPEX’s shares on the date
prior to the announcement of the merger.
In its report, ISS said: “The proposed transaction is in the
best interest of shareholders because it offers a significant
premium to the unaffected share price, brings certainty of value
through its all-cash consideration, and resulted from a lengthy and
apparently thorough exploration of strategic alternatives. While
several shareholders have publicly expressed opposition to the
valuation, and one of these shareholders has proposed
recapitalization strategies it believes will bring shareholders
higher value, these strategies also carry additional execution,
tax, litigation, and market risks (some of which have already begun
to play out) which make realization of value less certain.”
ISS cites three primary reasons for recommending that
stockholders vote FOR the transaction:
- “The cash consideration represents a
premium to shareholders;
- The company has conducted a thorough
exploration of strategic alternatives; and
- The all cash consideration would give
the shareholders certainty of value, while the alternatives
suggested by Mangrove Partners would be subject to risks associated
with the market for the company's primary product as well as
ongoing litigation.”
In commenting on Mangrove Partners’ opinion that CPEX should
restructure the Company on a standalone basis, ISS stated: “… the
all-cash consideration gives shareholder certainty of value, which
may not be realized if shareholders opt instead for a
recapitalization and standalone strategy, given the execution, tax,
litigation, and competitive risks associated with any standalone
strategy.”
James R. Murphy, Chairman of the Board of CPEX, commented, “We
are very pleased that ISS, one of the nation’s leading proxy
advisory firms, recognizes the value of the FCB transaction and
recommends that CPEX stockholders vote in favor of the merger
agreement with FCB. The ISS report confirms our Board of Directors'
unanimous view that the FCB transaction is the most compelling
opportunity for stockholders to immediately and with certainty
realize the maximum after-tax value for their shares.”
In a separate report, proxy service Glass Lewis & Co.
published an opinion regarding CPEX’s proposed merger agreement
with FCB. Commenting on the report, Murphy said, “We are
disappointed that Glass Lewis issued a report which we believe
reaches the wrong conclusion based upon its misguided underlying
assumption that a merger transaction of a single asset royalty
company can be accurately evaluated through the use of comparable
transactions, when in reality, differing facts and circumstances,
especially the facts and circumstances surrounding this
transaction, make such an analysis virtually irrelevant. We
recommend that stockholders follow ISS’ report and vote FOR the
merger agreement with FCB.”
On March 24, 2011, CPEX Pharmaceuticals is holding a special
meeting of stockholders to vote on a proposal to approve the FCB
merger agreement. Adoption and approval of the transaction requires
the affirmative vote of a majority of the outstanding shares of
CPEX common stock entitled to vote at the special meeting.
Therefore, failure to vote will have the same effect as a vote
against the adoption of the Merger Agreement. Whether or not you
are able to attend the special meeting in person, please follow the
instructions on the form of proxy mailed to you and submit your
proxy via the Internet or by telephone, or complete, sign and date
the proxy and return it in the envelope provided as soon as
possible. If you have Internet access, we encourage you to record
your vote via the Internet. This action will not limit your right
to vote in person at the special meeting.
If stockholders have any questions or need assistance voting
your shares, they should contact MacKenzie Partners, Inc., the
Company’s proxy solicitor, at (800) 322-2885 or (212) 929-5500
(call collect) or at cpex@mackenziepartners.com.
Permission to use quoted material was neither sought nor
obtained.
About CPEX Pharmaceuticals, Inc.
CPEX Pharmaceuticals, Inc. is an emerging specialty
pharmaceutical company focused on the development, licensing and
commercialization of pharmaceutical products utilizing CPEX’s
validated drug delivery platform technology. CPEX has U.S. and
international patents and other proprietary rights to technology
that facilitates the absorption of drugs. CPEX has licensed
applications of its proprietary CPE-215® drug delivery technology
to Auxilium Pharmaceuticals, Inc. which launched Testim, a topical
testosterone gel, in 2003. CPEX maintains its headquarters in
Exeter, NH. For more information about CPEX, please visit
www.cpexpharm.com.
ADDITIONAL INFORMATION AND WHERE TO FIND IT
CPEX has filed with the Securities and Exchange Commission (the
“SEC”) and furnished to its stockholders a definitive proxy
statement in connection with the proposed transaction with FCB (the
“Definitive Proxy Statement”). This communication may be deemed to
be solicitation material in respect of the merger with FCB.
Investors and security holders of CPEX are urged to read the
Definitive Proxy Statement and the other relevant materials (when
they become available) because such materials will contain
important information about CPEX and the proposed transaction with
FCB. The Definitive Proxy Statement and other relevant materials
(when they become available), and any and all other documents filed
by CPEX with the SEC, may be obtained free of charge at the SEC’s
website at www.sec.gov. In addition,
investors and security holders may obtain free copies of the
documents CPEX files with the SEC by directing a written request to
CPEX Pharmaceuticals, Inc., 2 Holland Way, Exeter, NH 03833,
Attention: Chief Financial Officer. Copies of CPEX’s filings with
the SEC may also be obtained at the “Investors” section of CPEX’s
website at www.cpexpharm.com/investor.htm.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE DEFINITIVE
PROXY STATEMENT AND THE OTHER RELEVANT MATERIALS (WHEN THEY BECOME
AVAILABLE) BEFORE MAKING ANY VOTING OR INVESTMENT DECISION WITH
RESPECT TO THE PROPOSED TRANSACTION WITH FCB.
CPEX and its directors and executive officers may be deemed to
be participants in the solicitation of proxies from the security
holders of CPEX in connection with the proposed transaction with
FCB. Information about those directors and executive officers of
CPEX, including their ownership of CPEX securities, is set forth in
the Definitive Proxy Statement (filed with the SEC on February 4,
2011) and in the proxy statement for CPEX’s 2010 Annual Meeting of
Stockholders (filed with the SEC on April 9, 2010), as supplemented
by other CPEX filings with the SEC. Investors and security holders
may obtain additional information regarding the direct and indirect
interests of CPEX and its directors and executive officers in the
proposed transaction with FCB by reading the proxy statements and
other public filings referred to above.
SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS
Certain items in this document may constitute forward-looking
statements within the meaning of the “safe harbor” provisions of
the Private Securities Litigation Reform Act of 1995. These
forward-looking statements involve certain risks and uncertainties
that could cause actual results to differ materially from those
indicated in such forward-looking statements, including, but not
limited to: the proposed transaction with FCB; the performance of
CPEX; the benefits of the proposed transaction with FCB and such
other risks and uncertainties as are detailed in the Definitive
Proxy Statement, in CPEX’s Annual Report on Form 10-K filed with
the SEC on March 29, 2010, and in the other reports that CPEX
periodically files with the SEC. Copies of CPEX’s filings with the
SEC may be obtained by the methods described above. CPEX cautions
investors not to place undue reliance on the forward-looking
statements contained in this document or other filings with the
SEC.
The statements in this document reflect the expectations and
beliefs of CPEX’s management only as of the date of this document
and subsequent events and developments may cause these expectations
and beliefs to change. CPEX undertakes no obligation to update or
revise these statements, except as may be required by law. These
forward-looking statements do not reflect the potential impact of
any future dispositions or strategic transactions, including the
proposed transaction with FCB, that may be undertaken. These
forward-looking statements should not be relied upon as
representing CPEX’s views as of any date after the date of this
document.
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