MiddleBrook Pharmaceuticals (NDAQ: MBRK) shares have dropped substantially from their highs earlier this year, but recently rebounded on news of a $100 million investment. The firm had been the center of buyout speculation for some time as they were in talks with several interested parties; however, the firm opted to take a $100 million capital infusion from Equity Group Investments. The move has many investors speculating the firm may be worth a lot more than it is trading at right now.

Under the terms of the agreement, MiddleBrook will issue EGI 30.3 million shares of common stock and a five-year warrant to purchase 12.1 million shares of common stock with an exercise price of $3.90 per share for an aggregate purchase price of $100 million. The move will bring MBRK's shares outstanding to around 86.31 million and should boost the market capitalization by $100 million to $224 million. This equates to an implied price of $2.60 per share, which pins the current discount at around 16% assuming the company can prove it is worth the same valuation as before the investment.

MiddleBrook will also receive a new chief executive officer that has a lot of experience in the pharmaceutical industry. The news may not be as good as a buyout for shareholders, but it does give new investors a chance to get in at a cheap price with management incentivized to push shares to at least $3.90 per share in order to realize the value of the additional warrants over time. Whether or not that happens remains to be seen, but MiddleBrook pharmaceuticals is definitely a stock to keep an eye on in the meantime.

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