If the offer were $10 and the share price rose to say $9 and management recommended against it I very much doubt it would be voted favorably. On the other hand if the share price didn't budge from where it was when the hostile offer came in, you may have a point.
I can't think of the last time a hostile bid won out for a biotech, but just the admission by a company that they're in discussions and declare a quiet period can spur price growth.
For all we know, under confidentiality agreements, the company may have already reached some informal agreement on potential terms for a future partnership and/or buyout of the company. The confidentiality agreement would prevent anything being said about it until conditions were met that would formalize it and must be released. It's very possible that the $3 million represents a good faith deposit on the ultimate agreement. I believe that such agreements may remain under confidentiality indefinitely.
Decades ago IMGN had the commitment of a BP to partner on a drug once the drug trial was to begin. Unfortunately they had made, and had all the drug needed to do the entire trial in cryogenic storage, and the freezer failed. They attempted to contract for the drug, but the contractor failed to make it, they had thought it could be synthesized, but failed to do it and had to go back to a specific type of mouse to make it, it took well over a year and they made it themselves and the partnership was announced when they were ready to initiate the trial.
My point is that such a partnership, or buyout, could be event based, price based, or based on a combination of certain events occurring and meeting certain price levels.
Gary
