STEVEN N. BRONSON
100 Mill Plain Road
Danbury, Connecticut 06811
Tel. (203) 791-3944
October 16, 2007
To the Shareholders of
Tikcro Technologies, Ltd.
Dear Fellow Shareholders:
I am the beneficial owner of approximately 14.6% of the issued
and outstanding ordinary shares of Tikcro Technologies, Ltd.
("Tikcro"), thus making me the largest shareholder of Tikcro. I have
been a shareholder of Tikcro for several years and I have patiently
waited for management of Tikcro to increase shareholder value.
However, over the past 4 1/2 years, the current management team of Tikcro,
namely Izhak Tamir and Eric Paneth, who collectively own 26.6% of the
issued and outstanding ordinary shares of Tikcro, have failed to take
any action to increase the value of Tikcro's ordinary shares. During
that period, Tikcro has been a shell corporation with nearly
$10,000,000 in cash with a stated plan of operation to seek to
consummate a merger or business combination transaction. Despite
generally favorable market conditions, Messrs. Tamir and Paneth have
not consummated any transaction nor generated any operating revenues
for Tikcro. I submit that Tikcro needs a new management team and that
Messrs. Tamir and Paneth should not be re-elected as directors of
Tikcro. Accordingly, I have submitted my proxy card for the upcoming
annual general meeting scheduled for October 25, 2007, and I have cast
my votes against the re-election of Izhak Tamir and Eric Paneth as
directors of Tikcro.
On August 14, 2007, I delivered a letter to the board of
directors of Tikcro (the "Board of Directors") that delineated examples
of Messrs. Tamir and Paneth's failure to seize and act upon business
opportunities to provide value to Tikcro's shareholders, including, the
Board of Directors' decision to reject a recent business opportunity I
introduced to Tikcro. A copy of my August 14th letter is attached as an
Exhibit to Amendment No. 10 to my Schedule 13D filing relating to the
ordinary shares of Tikcro. The business opportunity, referred to in my
August 14th letter, involved a significant capital infusion into Tikcro,
as well as the involvement and leadership of a well-respected and
successful entrepreneur (the "Investor") in Tikcro's business (the
"Transaction"). I believe that the Transaction was in the best
interests of Tikcro's shareholders, but Messrs. Tamir and Paneth,
acting in furtherance of their own self interest declined to proceed
with the Transaction claiming that the Investor did not agree to pay a
premium on the cash value of Tikcro's ordinary shares for a controlling
interest in Tikcro. I note that the premium Messrs. Tamir and Paneth
demanded to consummate the Transaction would have valued Tikcro's
ordinary shares at a price that was more then 50% above the price per
share at which the Board of Directors proposed to issue stock options
for 8.8% of Tikcro's ordinary shares to Messrs. Tamir and Paneth last
year.
<PAGE>
October 16, 2007
Page two
At Tikcro's 2006 annual general meeting of shareholders, the
Board of Directors recommended that the shareholders approve the
issuance of stock options representing 8.8% of the then issued and
outstanding ordinary shares of Tikcro to Messrs. Tamir and Paneth at a
price that was significantly below the cash value of Tikcro's ordinary
shares. Tikcro's 2006 Proxy Statement indicated that the reason the
Board of Directors wanted to grant the options to Messrs. Tamir and
Paneth was to provide a "greater incentive" to Messrs. Tamir and Paneth
to maximize shareholder value. It is rather surprising that Messrs.
Tamir and Paneth's existing 26.6% ownership interest in Tikcro is not a
sufficient incentive for Messrs. Tamir and Paneth to generate value for
Tikcro's shareholders. While the Board of Directors ultimately
withdrew the proposed grant of options to Messrs. Tamir and Paneth,
they did so only after I vehemently voiced my objections to the options
grant. As noted above, in connection with the Transaction, the Board
of Directors unreasonably demanded that the Investor pay a per share
price that was approximately 50% higher than the strike price upon
which they were going to issue nearly 9% of Tikcro's issued and
outstanding ordinary shares to Messrs. Tamir and Paneth one year ago.
Additionally, I believe that Tikcro's shareholder rights plan,
which acts to prevent any takeover or business combination transaction
involving Tikcro unless it is agreed to by the Board of Directors,
should to be terminated because the shareholder rights plan does not
benefit Tikcro's shareholders, but rather only serves to entrench
management. I submit the Board of Directors should seek to revitalize
the Transaction and submit the Transaction to a vote of Tikcro's
shareholders.
I believe that Messrs. Tamir and Paneth have not acted in the
best interest of Tikcro's public shareholders and that Messrs. Tamir
and Paneth, as well as the purported outside directors, are entrenched
and are unwilling to act in the best interests of Tikcro's public
shareholders. I believe Tikcro and its shareholders deserve a new
management team whose efforts will be focused on maximizing shareholder
value.
Accordingly, I have submitted my proxy card for the upcoming
annual general meeting scheduled for October 25, 2007, and I have cast
my votes against the re-election of Izhak Tamir and Eric Paneth as
directors of Tikcro. I believe that, whether or not Messrs. Tamir and
Paneth are re-elected to the Board of Directors, it is important to
remind management that Tikcro is owned by its shareholders and that
Tikcro must be managed for the benefit of all shareholders and not just
Messrs. Tamir and Paneth
Very truly yours,
/s/ Steven N. Bronson
Steven N. Bronson
Trade like a pro: Leverage real-time discussions and market-moving ideas to outperform.
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