The board of Avigen Inc (NASDAQ: AVGN) has announced that it will review BVF’s tender offer and advise AVGN’s stockholders of the board’s position by February 6.
We’ve been following AVGN (see archived posts here) because it’s a net cash stock (i.e. it’s trading at less than the value of its cash after deducting all liabilities) and specialist biotechnology activist fund BVF has been pushing it to liquidate and return its cash to shareholders. MediciNova Inc (NASDAQ:MNOV) has made an offer for AVGN that represents a clever way for AVGN’s stockholders to receive cash equivalent to that which they would receive in a liquidation (less $7M to be paid to MNOV) with the possibility for “an extraordinary, uncapped return” if MNOV is successful post-merger. We estimate AVGN’s net cash at around $1.22 per share (BVF estimates $1.20 per share), which is 30% higher than AVGN’s $0.94 close yesterday.
AVGN’s press release is as follows:
Avigen, Inc. (Nasdaq: AVGN), a biopharmaceutical company, today confirmed that BVF Acquisition LLC, a wholly owned subsidiary of Biotechnology Value Fund, L.P. (collectively, “BVF”), had commenced an unsolicited tender offer to purchase all of the outstanding shares of Avigen’s common stock that BVF does not already own for $1.00 per share in cash.
Avigen’s Board of Directors, consistent with its fiduciary duties, and in consultation with its financial and legal advisors, will carefully review and consider BVF’s unsolicited tender offer and will, on or before February 6, 2009, advise Avigen’s stockholders of the position of the Board of Directors regarding the offer as well as the reasons for the position taken.
Accordingly, Avigen’s Board of Directors urges Avigen’s stockholders to defer making a determination whether to accept or reject BVF’s unsolicited tender offer until they have been advised of the position of the Board of Directors.
[Full Disclosure: We have a holding in AVGN. This is neither a recommendation to buy or sell any securities. All information provided believed to be reliable and presented for information purposes only.]