Malin confirms the return of shareholders this year after the last transaction
State-backed pharmaceutical investment firm Malin is set to begin a “significant return” of capital to shareholders by the end of the year.
The company said on Friday it would distribute the majority of its 118 million euros in cash to investors via a takeover bid after assessing its strategic opportunities and business needs.
The news came as Malin announced the finalization of the sale of Altan Pharma, a drug developer in which the company had a 65% stake, to Ethypharm. Malin will receive € 68.1 million from the transaction after paying off Altan’s debt and transaction costs.
The proposed cash distribution will be a windfall of probably more than 10 million euros for the state through the Irish Strategic Investment Fund (ISIF).
ISIF, the state sovereign wealth fund, is the third largest investor in Malin with an 11.07% stake after backing the company with a € 50m investment in a € 330m IPO. euros in 2015.
The confirmation of a payment to major shareholders this year fulfills a promise Malin CEO Darragh Lyons made to investors in December 2020 to start handing out money to investors in 2021.
In a letter to shareholders late last year, Mr. Lyons pledged to begin monetizing his pharmaceutical holdings to raise “significant cash”.
The company began this process in February with the divestiture of Khymab, another of its holding companies, in a sale that provided $ 112 million (€ 94 million) of initial revenue with the possibility of $ 33 million more if certain conditions are met.
About half of the original cash proceeds from the Khymab deal was used to repay an outstanding debt of € 45 million to the European Investment Bank and fund a share buyback, while the balance was set aside to pay this year’s capital returns to shareholders.
An IPO on the Nasdaq by Malin-owned company Immunocore, also in February, raised gross proceeds of $ 268 million alongside a more modest private placement, but Malin did not liquidate its 7% stake. , which was worth $ 51 million at the time.
Malin said on Friday he had started “work on the preparatory steps” to launch a takeover bid.
The company said details of the offer will be announced when posting notice of its next general meeting, which is expected to take place before the end of 2021.
The public tender offer will be conditional on the approval of the shareholders at this meeting. Terms have yet to be decided and will depend on the company’s assessment of other cash needs, but Malin said most of its available cash will be returned to shareholders.
A takeover bid involves the company offering to buy shares from each investor for a certain price at a given time, and usually involves a premium over the current share price to induce shareholders to sell.
Malin retains stakes in six portfolio companies apart from Altan.
In its interim results in August, Malin said it had an intrinsic value of € 8.83 per share, compared to € 9.24 at the end of June.
Malin shares closed up 2.9% at € 7.00 on Friday.
The company bought back more than 1.5 million shares at a weighted average price of € 6.34 per share between its general meeting in July and August 25.