Cypress Bioscience Inc (CYPB)

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Cypress Bioscience board rejects new Ramius bid
On Tuesday September 28, 2010, 10:32 am

http://finance.yahoo.com/news/Cypress-Bioscience-board-apf-1602654004.html?x=0&.v=1

NEW YORK (AP) -- Cypress Bioscience Inc. said Tuesday its board of directors has unanimously rejected Ramius V&O Acquisition LLC's sweetened buyout offer of $4.25 per share and is committed to evaluating other alternatives.

Ramius owns 9.9 percent of Cypress' stock. In July it offered to buy San Diego-based Cypress in July for $4 per share, but that offer was rejected as inadequate. The current bid, which was made on Sept. 15, values Cypress at $164 million based on its total of 38.6 million shares outstanding.

Ramius has said it is taking its offer directly to shareholders because Cypress' board won't negotiate. The new offer marks a 21 percent premium to the stock's Sept. 14 closing price and a 70 percent premium to its closing price on July 16.

The new bid is scheduled to expire on Oct. 13.

"The Cypress board unanimously determined that the Ramius offer grossly undervalues Cypress' current business and future prospects, is highly conditional rendering it illusory and is not in the best interests of Cypress stockholders, other than Ramius and its affiliates," said Daniel H. Petree, lead independent director at Cypress.

Meanwhile, Cypress' board has adopted a short-term stockholders rights agreement, or "poison pill," in order to ward off hostile takeovers while it pursues strategic alternatives including the possible sale of all or part of the company. The rights plan would be triggered if any shareholder took control of 15 percent of the company's stock.

Cypress said it will continue to take actions to sell or exit its diagnostics business by the end of the third quarter.

Jefferies & Co. and Perella Weinberg Partners are serving as financial advisers to Cypress.

In morning trading, Cypress shares rose 7 cents to $3.74.