Ramius makes unsolicited, 60% premium offer to buy Cypress Bioscience for $4.00 per share in cash

Shares of USA-based Cypress Biosciences rocketed up almost 40% to $3.41 on news of a takeover offer yesterday from Ramius, which already owns some 9.9% of the company, that values Cypress at some $154 million, a premium of around 60% on its last closing price. Cypress confirmed receipt of the offer, which it is studying with its advisors.

Ramius Value and Opportunity Advisors, a subsidiary of Ramius LLC (which is currently the biggest stakeholder in the biotech firm at 9.9%) has sent a letter to the board of directors of Cypress outlining an offer to acquire all of the outstanding shares of the company that it does not already own for $4.00 per share in cash, a 60% premium over the July 16, 2010, closing price and a 74% premium over the average closing price since the acquisition of BioLineRx's BL-1020 antipsychotic drug for a potential $365 million (The Pharma Letter June 21).

In addition to the all-cash offer, Ramius also stated in the letter that it would be willing to consider an acquisition structure that would allow management to continue the development of the recently-acquired BL-1020 if they are able to fund the required financing for the Phase IIb trial themselves or from a third party financing source. As part of this structure, Ramius believes management and third party financing could retain a 50% interest in BL-1020, with the other half retained on a pro-rata basis by all existing Cypress shareholders. Ramius believes that this structure would provide shareholders with immediate liquidity through an all-cash acquisition at a significant premium to the current stock price and provide shareholders with an opportunity to retain future upside potential from the development of BL-1020 without shareholders funding the risk.