ESSA Bancorp Announces Acquisition Agreement with XenoTherapeutics for Shareholder Value Enhancement
- ESSA Pharma has agreed to be acquired by XenoTherapeutics, ensuring shareholder value and avoiding liquidation.
- Shareholders will receive cash payments and a contingent value right, potentially increasing their returns post-transaction.
- ESSA seeks court approval for initial cash distributions to shareholders before finalizing the acquisition process.
ESSA Pharma Enters Agreement for Acquisition by XenoTherapeutics
ESSA Pharma Inc. ("ESSA") has entered into a definitive agreement with XenoTherapeutics, Inc. ("Xeno") for the acquisition of all outstanding common shares of ESSA. This strategic move, facilitated by XOMA Royalty Corporation, positions ESSA to transition under new ownership while ensuring value for its shareholders. The agreement comes as ESSA navigates the complexities associated with its financial standing, and the board, led by President and CEO David Parkinson, underscores a strong belief in this transaction as the best path forward compared to a liquidation process.
Under the terms of the agreement, ESSA shareholders will receive a cash payment reflecting the company's cash balance at the time of closing, which will be adjusted for transaction costs, liabilities, and legal expenses. In addition to this cash payment, shareholders will be granted a non-transferable contingent value right (CVR) that entitles them to a pro rata share of up to $2,950,000—potentially yielding an additional $0.06 per CVR within 18 months following the transaction. This dual-structured payment approach aims to provide immediate liquidity while also offering upside potential, which is particularly important as the company works through its financial obligations and seeks to maximize shareholder returns.
ESSA plans to seek approval from the Supreme Court of British Columbia to allow for an initial cash distribution to shareholders before the closing of the transaction. Preliminary estimates suggest that the total per share value, excluding potential CVR payments, could reach approximately $1.91. The transaction will proceed through a court-approved plan of arrangement, signaling a methodical and legally grounded approach to this acquisition. Further communications regarding the details of the transaction and its implications for shareholders will be released in subsequent announcements.
In response to this development, inquiries related to the court applications are directed to ESSA's legal counsel, Blake, Cassels & Graydon LLP, based in Vancouver. The agreement marks a significant shift for ESSA, aligning with the company’s strategic objectives and addressing the interests of its shareholders in a challenging market landscape.
As the acquisition unfolds, stakeholders are encouraged to stay informed about the process, including any potential changes that may arise during the court proceedings. This move not only reshapes the future of ESSA but also reflects the broader trends in the biopharmaceutical industry, where consolidation and strategic partnerships become increasingly vital for navigating market challenges.