BioCentury
ARTICLE | Company News

CPEX drug delivery news

March 21, 2011 7:00 AM UTC

Investor Mangrove Partners Fund L.P. sent an unsolicited, non-binding letter to CPEX's board proposing a recapitalization implemented through a backstopped rights issue as an alternative to the proposed merger between CPEX and holding company Footstar Inc. (OTCBB:FTAR, Mahwah, N.J.). Mangrove, which owns about 5.7% of CPEX's outstanding shares, said it estimates its proposal would deliver a $34.73 per share value to shareholders, including a $28 per share special dividend, a tradable right and ongoing ownership of CPEX stock. The dividend would be funded by the sale of about $85.3 million in new senior secured notes due 2024, which bear interest at the London Interbank Offered Rate (LIBOR) plus 14%, existing cash and option proceeds. CPEX's board said the proposal "lacked certainty of financing and contains flawed valuation assumptions," and reaffirmed its recommendation that shareholders vote for the merger (see BioCentury, Jan. 10). ...