Zymeworks' board rejects unsolicited takeover bid

Canadian biotech Zymeworks (NYSE: ZYME) today announced that its board of directors, after thorough consultation with its financial and legal advisors, unanimously determined that the unsolicited, opportunistic, proposal from an activist shareholder, Dubai-based All Blue Falcons and its affiliates to purchase Zymeworks for $10.50 per share (~$773 million in total) substantially undervalues the company and is not in the best interest of the firm and its shareholders.

Zymeworks shares dipped around 2% to a low of $5.61 in early trading today, but were up 3.2% at $6.00 by late morning.

Following a comprehensive review of the unsolicited, opportunistic, non-binding proposal, including independent analyses completed by external financial advisors engaged by Zymeworks, the board has determined that the proposal significantly undervalues its prospects related to the company’s long-term business strategy and potential commercial opportunities. In addition, the non-binding proposal lacks credibility by offering no information regarding potential sources of funding or any details on their ability to consummate such a transaction. As a result, the board of Zymeworks has determined that it would not be appropriate to enter into discussions in response to the current proposal at a price of $10.50 per share.