ESSA Bancorp Acquires XenoTherapeutics to Enhance Shareholder Value and Streamline Operations
- ESSA Pharma has signed an acquisition agreement with XenoTherapeutics to enhance shareholder value and streamline operations.
- Shareholders are set to receive approximately $1.91 per share and a potential additional payout of up to $2,950,000.
- ESSA’s CEO emphasizes this acquisition as the best option for shareholders, avoiding a liquidation process.
ESSA Pharma Enters Acquisition Agreement with XenoTherapeutics to Maximize Shareholder Value
ESSA Pharma Inc. (NASDAQ: EPIX) has solidified its strategic direction by entering into a definitive agreement with XenoTherapeutics, Inc. (Xeno) for the acquisition of all outstanding common shares of the company. This transaction, facilitated by XOMA Royalty Corporation (NASDAQ: XOMA), positions ESSA to streamline its operations while delivering immediate value to its shareholders. With the deal structured to allow for a cash payment based on ESSA's cash balance at the time of closing, the company aims to provide a clear path forward in a challenging market environment.
The agreement outlines that ESSA shareholders will receive a cash payment, which is expected to be approximately $1.91 per share, contingent upon the company’s financial standing after deducting various transaction costs and liabilities. Moreover, shareholders will also receive a non-transferable contingent value right (CVR) that could yield an additional payout of up to $2,950,000, distributed over the subsequent 18 months. This dual-structure compensation not only reinforces ESSA's commitment to maximizing shareholder returns but also reflects a forward-thinking approach in times of financial uncertainty.
Dr. David Parkinson, President and CEO of ESSA, highlights the board's unanimous belief that this acquisition agreement is the most beneficial option for shareholders when compared to a liquidation process. The transaction will proceed through a court-approved plan of arrangement, ensuring a transparent and legally compliant execution. Following the approval of the Supreme Court of British Columbia, ESSA intends to seek authorization for an initial cash distribution to shareholders prior to the transaction's closing, thereby enhancing the immediate financial benefits available to its investors.
In addition to the acquisition, ESSA’s collaboration with XOMA Royalty as a structuring agent and financial backer demonstrates a commitment to navigating the complexities of the biotech sector. The involvement of XOMA Royalty not only bolsters the financial framework of the deal but also underscores the importance of strategic partnerships in achieving corporate objectives.
As ESSA Pharma moves forward with this significant transaction, stakeholders can anticipate further updates regarding the details of the court-approved arrangement. With a focus on maximizing shareholder value and ensuring a smooth transition, ESSA remains dedicated to its strategic goals while adapting to the evolving landscape of the pharmaceutical industry.