TWi Pharmaceuticals Inc (安成藥業) chairman Chen Chih-ming (陳志明) has announced a plan to take the specialty generic drug developer private as he tries to invest his own money to turn the struggling company around.
The deal, which would proceed with a tender offer first and share swap later, would end a six-year run on public markets for a company that focuses on the development of high-barrier generic drugs targeting mainly the US market.
In a regulatory filing on Thursday, TWi said that Chen has offered to acquire 52.44 million TWi shares, or 43.57 percent of the company’s issued shares, at NT$72 per share on the open market through one of his personal investment entities.
The offer represented a premium of 12.15 percent from TWi’s closing price of NT$64.2 on Thursday.
The news sent TWi shares 9.97 percent higher on Friday to close at NT$70.6.
TWi has paid-in capital of NT$1.2 billion (US$38.95 million). The company became a publicly traded company on the Taipei Exchange in December 2013 after raising more than US$110 million with an initial public offering.
The company remained in the red last year, although its revenue grew 2 percent annually to NT$822.95 million.
Due to deteriorating margins and a reduction in non-operating gains, the company posted a net loss of NT$508.77 million last year, or losses per share of NT$4.23.
Chen owns a 3.62 percent stake in the company. Together with other principal stakeholders and affiliated parties, the chairman and founder of TWi has a strong influence over the company.
Chen’s investment entity launched the tender offer on Friday and the scheme would continue through April 15, with a minimum purchase of 6.02 million shares, or 5 percent of TWi’s issued shares, said KGI Securities Co (凱基證券), which is helping to manage the offer.
After completing the tender offer, Chen’s investment entity would work to swap shares with TWi at a one-to-one exchange ratio in a bid to acquire 100 percent of the drug developer’s shares, KGI said in a tender offer document.
The investment entity would then apply with the financial regulator to delist TWi from the Taipei Exchange, hoping to make the company a private entity in the third quarter, KGI said.
To strengthen TWi’s financial structure and adjust its product development strategy, Chen said it is necessary for the company to go private, with him investing in it, as new drugs tend to be high-risk and have lengthy development periods, and he did not want to compromise the interests of other stakeholders, local media reported on Friday.
TWi said in the regulatory filing that the board members would soon conduct an extensive review of strategic options before agreeing to the buyout to ensure that it is in the best interests of all shareholders.
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