CPEX rejects 'inadequate' Rofe offer


CPEX Pharmaceuticals dismissed a $16-a-share tender offer as "inadequate" Wednesday, and said it is shopping around for a better deal that could include selling some or all assets of the company.The Exeter-based alternative drug delivery company, which spun off from Bentley Pharmaceuticals, also of Exeter, less than two years ago, said it hopes to have an announcement about its efforts to complete a "transaction" in the fall, but added that there is no guarantee there will be one.Meanwhile, it is urging shareholders to reject the only bid now on the table, made April 22 by Richard Rofe, managing director of Arcadia Capital, which owns just under 5 percent of the stock.Aside from the amount of the $40 million offer, which it said undervalued the company, CPEX said the offer contained too many contingencies, including one concerning financing. CPEX just came off nearly a $1 million quarterly loss, and the announcement that it was abandoning the development of Nasulin – a nasal insulin spray -- that it had poured most of its hopes and cash into since being spun off from Bentley.Yet its stock's value has increased, primarily because of a well-publicized attempt by Rofe, a Great Neck, N.Y., activist investor who has been sharply critical of the company, to buy it.Rofe has blasted the company for its focus on Nasulin, along with what he said was "excessive" executive compensation and not settling an intellectual property suit concerning its only product, Testim.CPEX shares closed Thursday at $25.9, up $2.72. Investors were responding to CPEX's disclosure that "it explore strategic alternatives to maximize shareholder value, including, but not limited to, a sale, merger or other business combination of the Company with a third party or a monetization of the Company’s assets including its rights to receive royalties and milestone payments." CPEX said it retained RBC Capital Markets Corporation and Goodwin Proctor LLP to serve as financial and legal advisers. It also retained MacKenzie Partners to communicate with shareholders and Sard Verbinnen & Co. to handle public relations.RBC suggested rejecting the offer, and the company wrote out a long filing explaining its reasons. -- BOB SANDERS/NEW HAMPSHIRE BUSINESS REVIEW
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