Nabi Biopharmaceuticals
(NDAQ:NABI) may be in for a fight after nearly 40% of its ownership
base filed Schedule 13Ds with virtually identical activist platforms -
the conversion of the company into a royalty trust following a special
dividend financed by divisional asset sales. Chapman Capital noted
today that while the company has outlined plans to this end, they have
yet to actually execute their plans and unlock shareholder value.
Just
how much would this deal be worth for shareholders? Well, Chapman
Capital estimated in their letter to the board that the divisional
asset sale of Nabi Biologics alone should be able to return around
$5/share - conveniently, around the price they averaged in at. The
subsequent focus on developing the company's new drugs should provide a
welcome boost for its shareholders. And finally, the change in
structure to a royalty trust will greatly improve its financial ratios
and subsequently their valuation.
In the end, activist hedge
funds are circling this stock for a reason - there is substantial value
that can be unlocked through a combination of divisional asset sales
and a change in the company's overall structure. Many shareholders are
banking on the stock at least doubling in the long-term following these
efforts while simultaneously cashing out a hefty dividend from asset
sales. Shareholders also have the comfort of knowing that they are
supported by Chapman Capital, who has essentially threatened a proxy
fight if the company doesn't follow through. All in all, this is
definitely a stock
worth watching!
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