Newron Woos Shareholders to Foil Majority Owner on Takeover
Sept. 4 (Bloomberg) -- Newron Pharmaceuticals SpA is rallying shareholders to back an acquisition that its biggest holder and partner may try to block.
The Italian biotechnology company needs investors with at least two-thirds of the shares to back the all-stock acquisition of NeuroNova AB at a Sept. 19 meeting after too few holders turned up for the vote to proceed at a gathering in July.
“It is unhealthy for any company to have so many shareholders who don’t care about the future of the company they have invested in,” Chairman Rolf Stahel said in an interview in Zurich. “That is offensive to me.”
Newron has written to investors, urging the company’s “silent majority” to express their view, and invited them to a meeting at a 14th-century tavern on the banks of Zurich’s Limmat river today to make the case for buying closely held NeuroNova, which would bring it two experimental medicines and cash to develop its most promising drug.
Zambon Company SpA, Newron’s largest shareholder with a 12 percent stake, may attempt to block the NeuroNova deal because it could make it more difficult and expensive to acquire all of Newron down the road, said Andrew Weiss, an analyst at Bank Vontobel AG in Zurich.
“There is a certain objection by Zambon, where they get diluted by other larger shareholders with deep pockets,” Weiss said by phone. He recommends buying Newron shares.
Luca Primavera, a spokesman for Zambon, declined to comment. The two companies are working well together to bring Newron’s experimental medicine against Parkinson’s disease to market, according to Stahel.
‘Not Run Away’
Zambon’s concerns may center on the deal diluting Newron’s commitment to the drug, called safinamide, Stahel said.
“I respect that,” he said. “We will not run away from that compound, we can’t afford to.”
Newron, based in Bresso, near Milan, and traded in Switzerland, agreed in June to buy Stockholm-based NeuroNova with new shares that value the Swedish company at about 34 million Swiss francs ($36 million) based on Newron’s closing share price yesterday. The shares would be issued on Sept. 28, if the acquisition is approved.
NeuroNova would leapfrog Zambon to become Newron’s biggest shareholder with 31 percent of the company. It would give Newron two experimental drugs against Parkinson’s and Lou Gehrig’s diseases, and 16 million euros ($20 million) in cash to help develop safinamide.
“The NeuroNova acquisition is necessary to fulfil our obligation to shareholders of running a ship that has more than one opportunity of creating shareholder value,” Stahel said.
The deal came a month after Zambon, a family-owned maker of pharmaceuticals and chemicals also based in Bresso, agreed to pay 20 million euros for a 9.1 percent stake in Newron. The payment also included cash that can be converted into shares later, a downpayment on marketing rights for safinamide in Europe and the U.S., and cash for its development.
“Zambon would like to get control of Newron at a cheaper price if they see that the drug is really working,” Weiss said. “On the other hand they don’t want to pay through their nose.” Zambon has raised its stake to 12 percent since April.
The Zambon deal was a lifeline for Newron after Merck KGaA handed back the marketing rights for safinamide in October, citing “strategic considerations.”
Merck’s move prompted Biotie Therapies Oyj of Finland to scrap a plan to buy Newron, caused investors including Great Point Partners LLC to sell the stock, and sent the shares to a record low of 1.82 Swiss francson Nov. 23.
The stock has more than quadrupled since then, closing at 8.65 francs yesterday. Newron traded for as much as 80 francs a share in 2007.
Newron needs a two-thirds majority of votes at the Sept. 19 meeting to approve the acquisition. With Zambon holding just over 12 percent, the company needs almost 25 percent of its other shareholders to register their shares with a bank and vote either in person or by proxy, according to Stahel.
Newron’s other shareholders, including Aviva Plc and Omega Fund Management Co., favor the deal, said Stefan Weber, Newron’s chief executive officer. About 70 percent of the stock is now held by so-called retail investors, he said. A spokesman for Aviva said the fund manager handling Newron is on holiday and Omega did not return calls and an e-mail seeking comment.
To contact the reporter on this story: Simeon Bennett in Geneva at
To contact the editor responsible for this story: Phil Serafino at
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