Cardiome Pharma Corp. (NASDAQ: CRME / TSX: COM) ("Cardiome" or the "Company") announced today that its Board of Directors has authorized management to proceed with a tender offer to purchase for cancellation up to 6,470,588 of its common shares for an aggregate purchase price of up to US$27.5 million. The offer will be conducted as a modified "Dutch auction", which will enable shareholders to select a price between US$4.25 per share and US$5.10 per share at which they are willing to tender their common shares to the offer. The purchase price will be the lowest price per share between US$4.25 and US$5.10 that enables Cardiome to purchase US$27.5 million of common shares. All common shares purchased under the offer will be purchased at the same price. Cardiome's directors and officers will not tender any of their common shares to the offer.
"The share buyback reflects our continuing commitment to returning value to shareholders and is an attractive use of capital given the recent trading price range of our common shares," said Doug Janzen, Chief Executive Officer and President of Cardiome. "We believe that the offer strikes the right balance between returning value to shareholders and retaining sufficient cash to pursue our current initiatives."
Oppenheimer & Co. and Canaccord Capital Corporation (the "Dealer Managers") will serve as dealer managers for the tender offer in the United States and Canada, respectively, and Computershare Investor Services, Inc. (the "Depository") will act as depository.
Details of the Tender Offer
An offer to purchase and issuer bid circular (the "Offer to Purchase and Circular") containing full details of the tender offer and the procedures for tendering is expected to be mailed to shareholders on or about August 31, 2009. The offer will expire at 5:00 pm (Eastern Time) on or about October 5, 2009, unless extended or withdrawn. The offer is not conditional upon a minimum number of common shares being tendered to the offer, but it is subject to certain other conditions that are specified in the Offer to Purchase and Circular.
As noted above, the modified "Dutch auction" procedures permit shareholders to select a price between US$4.25 per share and US$5.10 per share at which they are willing to sell their common shares to the Company. The purchase price, which will be the lowest price per share between US$4.25 and US$5.10 that enables Cardiome to purchase US$27.5 million of common shares, will be calculated immediately after the offer expires. All common shares purchased under the offer will be purchased at the same price, even if they were tendered at a price per share which is less than the purchase price. The Company will not purchase any common shares that are tendered to the offer at a price per share which is greater than the purchase price. If the number of common shares tendered to the offer at or below the purchase Price would result in an aggregate purchase price of more than US$27.5 million, the common shares tendered to the offer will be subject to pro-ration as described in the Offer to Purchase and Circular.
If the offer is fully subscribed at a purchase price of US$4.25 per share, Cardiome will purchase 6,470,588 common shares under the offer (representing approximately 10.1% of the issued and outstanding common shares as of the date hereof). If the offer is fully subscribed at a purchase price of US$5.10 per share, Cardiome will purchase 5,392,157 common shares under the offer (representing approximately 8.4% of the issued and outstanding common shares as of the date hereof).
Neither Cardiome nor any of its directors or officers, and neither of the Dealer Managers nor the Depository, makes any recommendation to any shareholder as to whether to tender or refrain from tendering common shares to the offer. Shareholders must make their own decision as to whether to tender common shares to the offer and, if so, how many common shares to tender to the offer. Shareholders are strongly encouraged to read the Offer to Purchase and Circular and to seek advice from their financial and tax advisors prior to making any decision with respect to the offer.