An investor is ratcheting up the pressure on Acelyrin to pull out of a planned merger with Alumis, setting out its case for voting against a deal it argues is worse for shareholders than liquidating the biotech.
Trium Capital, a U.K.-based investor, built a 5.4% stake in Acelyrin earlier this year. At the time, Trium said it planned to talk to Acelyrin’s management about the merger. Trium has since discussed the merger with Acelyrin and Alumis, the investor said in an open letter, but still has concerns about the deal. With two weeks to go until Acelyrin shareholders vote on the merger, Trium has gone public with its worries (PDF).
“We believe all the offers received by [Acelyrin] thus far are inferior to a winding down of the company and returning capital to shareholders,” Trium said. “A liquidation of the company provides certainty of value well above the value from any of the offers. We believe there is no reason for shareholders to accept any transaction that provides upfront value less than value that can be expected in a liquidation.”
The offers received by Acelyrin include Concentra Biosciences’ attempt to buy the biotech for $3 a share. Acelyrin rejected that takeover bid in March. Tang Capital Partners, an investment firm that has made its name trying to buy and shutter floundering biotechs, owns Concentra.
Trium calculated Acelyrin shareholders will receive between $3.53 and $3.67 per share if it liquidates. The calculation is based on Acelyrin’s cash, which Trium puts at $4.45 a share. Trium assumed lonigutamab, Acelyrin’s thyroid eye disease candidate, has no value and the liquidation incurs substantial costs when forecasting shareholder returns. The investor said Alumis’ merger implies a $2.06 per share valuation.
Acelyrin discussed the merits of liquidating in paperwork it sent to investors. According to the biotech, “the added time and costs required to wind down ... operations in an orderly fashion” and the need to hold back “a meaningful amount” of cash to cover “known and potential unknown liabilities” meant that liquidating was not reasonably likely to create greater value for shareholders than the merger.
Trium was dismissive of Acelyrin’s assessment. The investor said Acelyrin only considered winding down late in the process, adding that there “appears to be no serious analysis done by the board or its financial advisor.” Trium called Acelyrin’s process “inexplicable.” Based on its concerns, Trium plans to vote against the merger when Acelyrin puts the proposal to shareholders on May 13.