Cypress Bioscience Agrees To Be Acquired by Ramius LLC and Royalty Pharma for $6.50 Per Share in Cash Date : 12/15/2010 @ 8:00AM
GAME OVER. Adios, Dear Board. ;)
Cypress Bioscience, Inc. (Nasdaq: CYPB) (“Cypress”), a pharmaceutical company engaged in the development of innovative drugs to treat central nervous system (CNS) disorders, announced today that it has entered into a definitive merger agreement with Ramius V&O Acquisition LLC, an affiliate of Ramius LLC (collectively, “Ramius”) and affiliates of Royalty Pharma (“Royalty Pharma”), providing for the acquisition of Cypress by Ramius and Royalty Pharma. Under the terms of the agreement, which was unanimously approved by Cypress’ Board of Directors, Ramius will amend its existing tender offer to acquire all of the outstanding shares of Cypress common stock it does not already own at an increased price of $6.50 per share in cash. The transaction has a total equity value of approximately $255 million on a fully-diluted basis.
The $6.50 per share cash purchase price represents a premium of approximately 63% over Ramius’ original unsolicited proposal to acquire Cypress for $4.00 per share in cash, and a premium of approximately 160% to the Company‘s unaffected share price on July 16, 2010, the last trading day prior to the public disclosure of Ramius’ unsolicited proposal.
“For more than two months, Cypress’ Board of Directors undertook a comprehensive evaluation of the Company’s strategic alternatives,” said Daniel H. Petree, Lead Independent Director of Cypress’ Board of Directors. “After thorough and extensive analysis with our financial advisors, Cypress’ Board unanimously concluded that this transaction with Ramius and Royalty Pharma provides significant cash value to our stockholders and is in the best interests of our stockholders, customers and employees.”
Ramius Partner Managing Director Jeffrey C. Smith stated, “We are pleased that Cypress’ Board of Directors has accepted our all-cash offer of $6.50 per share. We firmly believe that this offer represents full and fair value for all Cypress stockholders and look forward to an expeditious closing of the merger.” Mr. Smith went on to state, “Royalty Pharma has proven to be an extremely valuable partner in our acquisition of Cypress. Their expertise in investing in and acquiring royalty interests has allowed us to structure a unique and efficient transaction that we believe clearly maximizes value for all stockholders.”
Pablo Legorreta, Chief Executive Officer of Royalty Pharma, commented, “As the leading investor in biopharmaceutical royalties, we have a long history of working in partnerships with biotech companies and their management teams. This transaction validates the successful record of Cypress’ team under the leadership of Dr. Jay Kranzler, which includes the development of two FDA approved products.” Mr. Legorreta further added, “We are excited to add the Savella® royalty to our diversified portfolio of leading biopharmaceutical royalties and look forward to working with Cypress management to enhance the value of the company’s pipeline assets.”
Cypress’ Board of Directors unanimously determined that the definitive merger agreement with Ramius and Royalty Pharma and the terms of the Ramius/Royalty Pharma tender offer are fair to and in the best interests of Cypress and its stockholders, and recommends that Cypress stockholders tender their Cypress shares to Ramius/Royalty Pharma and adopt the merger agreement. Cypress will amend its Schedule 14D-9 previously filed with the Securities and Exchange Commission to reflect the recommendation of its Board of Directors.
The transaction is subject to certain closing conditions, including the valid tender of sufficient shares, which, when added to shares owned by Ramius and its affiliates and Royalty Pharma, constitute more than 50% of the total number of common shares outstanding on a fully-diluted basis. It is also subject to regulatory approvals and other customary closing conditions. There is no financing condition to consummate the transaction.
Ramius and Royalty Pharma’s tender offer for all of the outstanding shares of common stock of Cypress, which was scheduled to expire at Midnight, New York City time, December 17, 2010, will be extended and remain open through Midnight, New York City time, on December 29, 2010, unless further extended in accordance with the terms of the merger agreement. As of the close of business on December 14, 2010, approximately 3,109,292 shares of common stock of Cypress, representing approximately 8.1% of all outstanding shares, were validly tendered and not withdrawn pursuant to the tender offer. This amount does not include the 3,815,000 shares owned by Ramius and its affiliates.
Following the completion of the tender offer and, if required, receipt of approval by Cypress’ stockholders, Ramius expects to consummate a merger of Ramius V&O Acquisition LLC and Cypress in which any shares of Cypress not tendered into the tender offer will be cancelled in exchange for the right to receive $6.50 per share in cash. The transaction is currently expected to close in January 2011, but could close as early as December 30, 2010. The terms and conditions of Ramius and Royalty Pharma’s amended tender offer will be described in amended offer documents, which will be filed with the Securities and Exchange Commission.
Jefferies & Company, Inc. is serving as financial advisors to Cypress and Cooley LLP, Sullivan & Cromwell LLP and Potter Anderson & Corroon LLP are serving as Cypress’ legal advisors. Perella Weinberg Partners is serving as financial advisors to the Board of Directors of Cypress. Olshan Grundman Frome Rosenzweig & Wolosky LLP is serving as legal advisor to Ramius. Groton Partners is serving as financial advisor to Royalty Pharma. Goodwin Procter LLP and Akin Gump, Strauss, Hauer & Feld, LLP are serving as legal advisors to Royalty Pharma.
