Liminal BioSciences announces agreement with Structured Alpha LP
Thursday, July 13, 2023
Liminal BioSciences Inc. ("Liminal BioSciences" or the "Company") (NASDAQ: LMNL ) and Structured Alpha LP ("SALP") Fund managed by Thomvest Asset Management Ltd. announced today that they have entered into a definitive agreement (the "Arrangement Agreement") pursuant to which SALP will acquire all of the issued and outstanding common shares of Liminal BioSciences (the "Common Shares") , which the company does not already own.
Under the terms of the Agreement, Liminal BioSciences shareholders (excluding SALP and its affiliates or partners) will receive $8.50 per common share, representing a premium of approximately 135% over Liminal BioSciences' closing price on the Nasdaq Capital Market ("Nasdaq") on April 4 , 2023 , the last full trading day prior to the public announcement of SALP's original non-binding offer to acquire the remaining common shares of Liminal BioSciences that the Company does not already own, the offer is US$1.00 per common share above SALP's original non-binding proposal.
“Following an extensive process led by a special committee composed of neutral and independent directors, we are pleased to have agreed terms for a transaction with SALP, which has the full support of the Liminal BioSciences Board of Directors. The transaction will deliver immediate value and liquidity to our minority shareholders at a significant premium," said Bruce Pritchard , Liminal BioSciences Chief Executive Officer. "Reaching this point is a testament to all that the entire Liminal BioSciences team has accomplished We look forward to partnering with SALP to continue our goal of developing and delivering state-of-the-art treatments to patients."
"As a long-standing significant investor in Liminal BioSciences, we are pleased to have entered into this agreement, which offers minority shareholders a significant premium and the security of payment for their shares," said Eugene Siklos on behalf of SALP.
The special committee of the board of directors of Liminal BioSciences (the "Special Committee"), composed solely of disinterested directors, has unanimously recommended that the board of directors of Liminal BioSciences approve the Arrangement and unanimously recommends that the minority shareholders attend the special meeting of shareholders for approval of the Transaction (the "Assembly") to vote for the special resolution approving the Transaction (the "Arrangement Resolution"). The Board of Directors of the Company, upon receipt of the unanimous recommendation of the Special Committee, unanimously resolved (with Eugene Siklos and Alek Krstajicresigned from the meeting due to bias) that the transaction is in the best interests of the Company and is fair in substance and procedure to the Company's minority shareholders, and unanimously recommends that the minority shareholders vote in favor of the Arrangement Resolution at the meeting. All directors and officers of Liminal BioSciences have endorsement and voting agreements in place; thereby agreeing, subject to the terms contained therein, to vote in favor of the special resolution with all of their common shares at the meeting.
Transaction data
The transaction will be completed pursuant to a court-approved plan of action pursuant to Section 192 of the Canada Business Corporation Act and is subject to the satisfaction of customary closing conditions, including (without limitation) court approval and Liminal BioSciences stockholder approval, as described below. Liminal BioSciences expects that upon closing of the transaction, the Company will no longer be subject to reporting requirements under applicable Canadian securities laws or the US Securities Exchange Act of 1934, as amended, and its common shares will be delisted from Nasdaq.
Completion of the transaction requires the approval of at least (i) two-thirds (66 2/3 %) of the votes cast by shareholders present in person or by proxy at the meeting and voting as a single class (each holder of common stock is entitled to one vote per common share), and (ii) the approval of a majority of the holders of common stock present or by proxy at the meeting, except for those stockholders whose votes may be cast for purposes of "minority approval." Multilateral Instrument 61-101 — Protection of Minority Shareholders in Special Deals("MI 61-101") to be excluded in a "business combination" (the "Minority Approval"), namely, the common stock over which SALP and its affiliates and partners exercise control or power. For more details on the applicable requirements of the Votes will be included in a management information circular to be filed in connection with the transaction and to be mailed to Liminal Biosciences shareholders.
The agreement provides for the company's standard non-solicitation clauses and gives SALP the right to honor any superior offer. In addition, under the Agreement, the Company would, under certain circumstances, pay SALP a termination fee of US$322,000 even if SALP did not exercise its right to adjust its bid to a superior bid sponsored by the Company. SALP has informed the Special Committee that it would not consider alternative control transactions.
The transaction is expected to close by September 30, 2023 , subject to the satisfaction of customary closing conditions . The transaction is not subject to any financing condition.
Opinion and formal evaluation
BMO Nesbitt Burns Inc. ("BMO Capital Markets") has been retained by the Special Committee to provide an Opinion under the Committee's oversight and an independent formal assessment pursuant to MI 61-101 As of July 11, 2023, its opinion on the adequacy of the consideration to be received under the Arrangement from holders of Liminal BioSciences common stock (excluding individuals who hold Liminal BioSciences common stock and whose votes are to be disqualified for purposes of determining minority approval BMO Capital Markets has also prepared a formal valuation of Liminal BioSciences common stock pursuant to MI 61-101, which is for one Liminal BioSciences common stock (as of December 11, 2018).July 2023) a reasonable market value range from US$5.00 to $15.00 . BMO Capital Markets opinion and rating are based on various assumptions, procedures, matters and limitations and qualifications for the verification described in this opinion and rating. Copies will be included in the directors' circular to be sent to Liminal BioSciences shareholders in connection with the special meeting scheduled to be held to review the Arrangement. The Management Information Circular will also include factors under review by the Liminal BioSciences Special Committee and Board of Directors and other relevant information.
Advisor
BMO Capital Markets is serving as the Special Committee's independent financial advisor in connection with the acquisition. Stikeman Elliot LLP and Cooley LLP are serving as legal counsel to Liminal BioSciences.
Langstaff & Co. is acting as financial advisor to SALP. Torys LLP is serving as legal counsel to SALP.
Important additional information
Liminal BioSciences intends to mail a directors' circular (the "Information Circular") to its shareholders in the coming weeks and to hold the meeting prior to September 15 , 2023. The Information Circular, together with the Agreement, will be filed with Canadian Securities Administrators ("CSA") at www.sedar.com on SEDAR. Further details on the terms of the transaction and the rationale for the recommendations of the Special Committee and the Board of Directors of Liminal BioSciences will be set out in the information circular.
In addition, the Company intends to file an updated report on the transaction with the US Securities and Exchange Commission ("SEC") on Form 6-K, which will include the Agreement as an annex thereto. The Company, SALP and certain of its affiliates intend and to file a statement of transactions with the SEC pursuant to Schedule 13E-3 ("Schedule 13E-3"). PRIOR TO A VOTING, LIMINAL BIOSCIENCES SHAREHOLDERS ARE URGED TO READ THE INFORMATION CIRCULAR, SCHEDULE 13E-3 AND OTHER MATERIALS FILED IN THE WHOLE WITH THE SEC AND CSA WHEN AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION REGARDING THE TRANSACTION, THE PARTIES TO THE TRANSACTION AND MATTER RELATED THERETO WILL BE INCLUDED.www.sec.gov or from the CSA's website at www.sedar.com or from the Liminal BioSciences website at www.liminalbiosciences.com .
About Liminal BioSciences Inc.
Liminal BioSciences is a development-stage biopharmaceutical company focused on the discovery and development of novel and distinctive small molecule therapeutics that modulate G-protein coupled receptors or GPCR pathways. Liminal BioSciences is developing proprietary novel small molecule therapy candidates with the goal of developing best/first therapeutics for the treatment of metabolic, inflammatory and fibrotic diseases with significant unmet medical needs by leveraging our integrated drug discovery platform, medicinal chemistry expertise and... employ a deep understanding of GPCR biology. The Company's pipeline currently consists of three programs. The candidate LMNL6511 selected for clinical development, a selective antagonist for the GPR84 receptor, is expected to enter a phase 1 clinical trial in the second half of 2023. Liminal BioSciences is also developing LMNL6326 as an OXER1 receptor antagonist targeting the treatment of eosinophil-related disease and GPR40 agonists, both of which are in the preclinical stage. In addition to these programs, the Company continues to evaluate other development opportunities to expand its pipeline. both of which are in the preclinical stage. In addition to these programs, the Company continues to evaluate other development opportunities to expand its pipeline. both of which are in the preclinical stage. In addition to these programs, the Company continues to evaluate other development opportunities to expand its pipeline.
Liminal BioSciences has active operations in Canada and the United Kingdom.
About Structured Alpha LP
Thomvest Asset Management Ltd. is the general partner of SALP. Thomvest Asset Management Ltd. is part of a group of investment companies making investments on behalf of Peter J. Thomson and his family.
