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All Blue Capital in $773 million bid for Zymeworks

© Reuters.

(Corrects April 28 story to remove reference to debt in paragraph 3. The error was repeated in previous versions of the story.)

By Anirban Sen

(Reuters) -Investment firm All Blue Capital has approached Zymeworks Inc, a developer of antibody therapies for cancer, with a $773 million acquisition offer.

In a regulatory filing late on Thursday, All Blue said it had made a non-binding offer for $10.50 per share in cash, which represents a 116% premium to Wednesday’s closing price of $4.86.

There is no certainty that Zymeworks will negotiate a deal, people familiar with the matter said. The company unsuccessfully engaged with potential buyers last year, the sources added, requesting anonymity.

“Received an unsolicited, non-binding proposal from All Blue Falcons FZE and its affiliates to purchase the company for $10.50 per share in cash,” Zymeworks said in a statement, adding that its board of directors will carefully review the proposal.

Shares of Zymeworks jumped by more than 45% in after-market trade on Thursday after Reuters reported the bid.

In the filing, All Blue said it is currently in talks with potential co-investors and financing partners for the proposed acquisition.

Vancouver, Canada-based Zymeworks develops antibody treatments for different types of cancer and is currently working on clinical trials for a number of its products. It has repeatedly missed earnings estimates over the past few quarters and its shares have lost about 84% of their market value over the past 12 months.

“We believe that the company has suffered from severe value erosion due to a number of serious missteps by an unfocused leadership with no clear strategy for improving performance,” All Blue said in a letter to the company’s board of directors on Thursday.

“We believe that Zymeworks stockholders deserve better than the consistent value destruction they have suffered during this relatively short period of time,” they added.

In January, Zymeworks’ recently appointed Chief Executive Kenneth Galbraith announced that the company would need to immediately raise capital to continue operations and that it would lay off 25% of its workforce.

All Blue Capital is a technology-focused investment firm, whose investments include Airbnb, SpaceX, Lyft (NASDAQ:LYFT) and Pinterest (NYSE:PINS). All Blue currently holds a small stake in Zymeworks.

All Blue Capital in $773 million bid for Zymeworks

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