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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$4.76 (06/21/07)
