State-backed pharma investment company Malin has proposed returning up to €80m to its shareholders.
Last month the company announced that it would distribute a majority of its €118m in cash to investors via a tender offer after assessing its strategic opportunities and business needs.
Under the offer, shareholders are being invited to tender some or all of their ordinary shares at a price of €8.30 per ordinary share, according to a statement from Malin.
The price represents a premium of 27.7pc to the closing price of €6.50 per ordinary share on November 19 and represents a 7.1pc discount to estimated intrinsic equity value per ordinary share of €8.93 also on November 19.
The buyback will provide a windfall of €9.2m for the State through the Ireland Strategic Investment Fund (ISIF).
ISIF, the State’s sovereign wealth fund, is the third-largest investor in Malin.
Qualifying shareholders are not required to tender any of their shares if they do not wish to do so.
Following the return of the proposed tender proceeds, Malin estimates that it will have cash of approximately €36m, which the board believes is sufficient capital, alongside expected future realisation proceeds, “to exploit future value-accretive strategic business opportunities and to support its existing investee companies through to their maximal value potential,” Malin said.
In February, the disposal of Kymab, another of Malin’s portfolio companies, provided $112m (€95m) in upfront proceeds with the possibility of $33m more to come if certain conditions are met.
About half of the upfront cash proceeds from the Kymab deal were used to repay an outstanding €45m debt to the European Investment Bank and fund a share buyback.
Meanwhile, in June with the announcement of the proposed sale of Altan Pharma to Ethypharm, Malin said that it expected to use the net proceeds received from the sale, along with cash on hand, to undertake a “significant” return of capital to shareholders following the close of the deal.
“We are delighted to be delivering on our long-standing commitment to return excess capital of the business to our shareholders,” Darragh Lyons, CEO of Malin, said.
“This follows the significant bolstering of our cash reserves and the repayment of our debt during 2021, following the divestments of Kymab and Altan at significant premiums to their last disclosed fair value estimates.”
The offer to shareholders opens today and closes on December 21.