Kezar Life Sciences Board Unanimously Rejects Concentra’s Acquisition Proposal and Implements Limited Duration Stockholder Rights Plan
Kezar Life Sciences, Inc. (Nasdaq: KZR), a clinical-stage biotechnology company focused on developing novel small molecule therapeutics for immune-mediated diseases, announced today that its Board of Directors has unanimously rejected the unsolicited, non-binding acquisition proposal from Concentra Biosciences, LLC. Concentra’s offer involved acquiring all outstanding shares of Kezar for $1.10 per share in cash, along with a contingent value right entitling stockholders to 80% of the net proceeds from any out-license or sale of Kezar’s development programs or intellectual property.
After careful review and consultation with independent financial and legal advisors, the Board concluded that the Concentra proposal significantly undervalues Kezar. The proposal would yield an implied equity value for Kezar’s stockholders that is substantially below the company’s available liquidity and does not adequately represent the potential of zetomipzomib as a therapeutic candidate. As a result, the Board determined that the proposal is not in the best interests of Kezar or its stockholders.
In response to Concentra’s proposal and the rapid accumulation of 9.9% of Kezar’s common stock by Concentra and its affiliates, the Board has adopted a limited duration stockholder rights plan, effective immediately.
“Kezar continues to face a significant dislocation in its stock price, which does not reflect its fundamental value,” stated Graham Cooper, Chairman of the Board. “The Rights Plan aims to ensure that all stockholders can realize the long-term value of their investment. It is designed to reduce the likelihood of any party gaining control of Kezar through open market accumulation without offering all stockholders an appropriate control premium or without providing the Board adequate time to make informed decisions.”
The Rights Plan allows the Board to engage with potential acquirers, including Concentra, if such discussions are deemed beneficial for Kezar and its stockholders. The plan aligns with those adopted by other publicly held companies in similar situations and does not include provisions that would limit a future Board’s ability to redeem the rights.
As part of the Rights Plan, the Board declared a dividend of one preferred share purchase right for each outstanding share of Kezar’s common stock, with a record date of October 28, 2024. These rights will become exercisable only if a person or group acquires or proposes to acquire beneficial ownership of 10% or more of Kezar’s common stock (15% for passive institutional investors). Current stockholders above these thresholds are grandfathered at their existing ownership levels but cannot increase their holdings without triggering the Rights Plan.
Once exercisable, each right will allow its holder (excluding any Acquiring Person, whose rights become void) to purchase additional shares of Kezar’s common stock at a price of $7.16, equivalent to twice the exercise price. The Rights Plan also includes standard flip-over and exchange provisions.
The Rights Plan is set to expire on October 17, 2025, unless earlier redeemed or exchanged by Kezar.
Kezar stockholders do not need to take any action at this time. More information regarding the Rights Plan will be included in a Form 8-K that Kezar will file with the U.S. Securities and Exchange Commission.
About Kezar Life Sciences
Kezar Life Sciences is a clinical-stage biopharmaceutical company developing novel small molecule therapeutics to treat unmet needs in immune-mediated diseases.
