Sept. 5, 2013
Shareholder rights attorneys
at Robbins Arroyo LLP are investigating the acquisition of Astex Pharmaceuticals, Inc. (NASDAQ: ASTX) ("Astex") by Otsuka Pharmaceutical Co., Ltd. ("Otsuka"). On
September 5, 2013
, the two companies announced the signing of a definitive merger agreement under which Otsuka will acquire Astex for
per share in cash. The transaction is expected to close in the fourth quarter of 2013.
Is the Merger Best for Astex and Its Shareholders?
Robbins Arroyo LLP's investigation focuses on whether the board of directors at Astex is undertaking a fair process to obtain maximum value and adequately compensate its shareholders in the merger. As an initial matter, the
consideration represents a premium of only 27.25% based on the Astex's closing price on
, 2013. That premium is substantially below the average one-day premium of 53.13% for comparable transactions in the last three years. Moreover, as recently as
July 19, 2013
, an analyst at Brean Capital, LLC set a target price of
per share, and an analyst at RBC Capital Markets set a target price of
per share on
April 4, 2013
In addition, Astex's board of directors agreed to provide additional compensation to certain company executive officers subject to consummation of the merger. This executive compensation includes a
payment to Chairman of the Board and Chief Financial Officer,
; and a
payment to Astex's Chief Medical Officer,
Given these facts, Robbins Arroyo is examining Astex's board of directors' decision to sell the company to Otsuka now rather than allow shareholders to continue to participate in the company's continued success and future growth prospects, and whether they are seeking to benefit themselves.