Malin Corporation has unveiled plans to buy back up to 76 per cent of its remaining shares with cash raised from the sale of its stakes in two biopharmaceutical companies.
The Dublin-listed life sciences investment company said on Wednesday it plans to spend €150 million repurchasing stock through a so-called tender offer of €10.30 per share – a 17 per cent premium to its closing price from the previous session.
The maximum amount Malin plans to return to shareholders under the deal would equate to about 76 per cent of its shares in issue, based off tender offer valuation.
The transaction is expected to launch later this month and will be subject to shareholder approval at a meeting in mid-March.
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Malin decided in November to scrap plans to repurchase €45 million of shares following the sale of its stake in a clinical-stage biopharma company called CG Oncology, after Poseida, a Nasdaq-listed company in which it held a 12 per cent stake, revealed it would be bought by Roche in a cash deal worth up to $1.5 billion (€1.44 billion).
Roche completed the purchase on January 8th, resulting in a $106.5 million upfront payment to Malin for its stake – and the potential to receive a further $47.3 million in time. The deal was valued a multiple of the €33.7 million value Malin had put on its Poseida stake only weeks before.
The tender offer will accelerate the ultimate winding down of Malin, which has returned more than €220 million of excess capital to shareholders over the past four years as it sold down other investments, including stakes in Immunocore, which is focused on developing cancer treatments, and eczema-targeting Kymab.
Malin continues to have investments in unlisted companies that were last valued at a total of €27.1 million.
Davy analyst Colin Grant said the return of hundreds of millions of euro of cash to shareholders in recent years “represents a remarkable turnaround” for investors a decade after Malin floated at a price of €10 a share.
“After trading higher for a period of time, the stock hit a low in March 2020 of €1.55 a share in the depths of Covid. This represented an 85 per cent decline in its share price from the IPO level,” he said.
The stock recently breached the €10 level for the first time in seven years. Malin puts its net asset value at €10.77 per share.
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