Biotech Values

[mouton29]

The operative provision in the underwriting agreement is the one I quoted before:

2. Subject to the terms and conditions herein set forth, (a) the Company agrees to sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from the Company, at a purchase price per share of $15.98, the number of Firm Shares as set forth opposite the name of such Underwriter in Schedule I hereto

There are various conditions to this obligation but they are all met so far as I know, things like no misrepresentations by the company. If they hadn't been met, there would have to be a press release.

To answer your question, unless the underwriters can argue that there was a failure to satisfy the conditions -- which they can't so far as I know and had there been we would have heard -- the company has the legal right to demand a closing and I'm told that in practice, no one would give the underwriters extra time to sell the stock to their buyers. That's why they get the discount, to take that risk. I'm also told that not everyone announces the closing of the offering, most do but some don't, so the person I consulted with thought the most likely scenario was the deal closed and they didn't announce.