Scott Sacane, who manages the Durus group of funds, has been a long-term fan of Esperion, although the extent of the stock purchases disclosed in an SEC filing last Tuesday probably were not what he had in mind. But while Wall Street had fun speculating on how the snafu came about, ESPR took a price hit and almost certainly left money on the table when it priced its follow-on offering on Thursday.
On Tuesday, word spread that the Sacane Group may have inadvertently purchased an extremely large chunk of the cardiovascular company. There were rumors that a software glitch actually caused the transactions - both purchases and sales - which were massive.
According to the SEC filing, the funds acquired 12.6 million ESPR shares from July 25, 2001 through July 24, 2003 for an aggregate cost of $117.2 million. During that time, the funds also sold 3.3 million ESPR shares for total proceeds of $57.7 million, putting the group's total outlay at $59.5 million.
The revelation quickly focused attention on the viability of ESPR's 4 million share follow-on, which the company had filed on July 11 when its price was $20.08. ESPR slipped $2.50 (13%) to $17.38 on 6.8 million shares on Tuesday, dropped another $2.18 (13%) to $15.20 on 3.7 million shares on Wednesday and were down $4.71 (23%) on the week at $15.78.
The funds now hold almost 33% of the company. Sacane didn't return calls seeking comment, but the firm's filing said that he acquired the shares "with a passive intent; that is, with no purpose, intent or effect of controlling the Company."
ESPR also was not talking outside of a press statement that acknowledged the holdings. The statement added that Sacane has agreed not to sell any of the shares before Oct. 29 and has agreed to certain voting rights restrictions.
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