Kezar board rejects Concentra proposal, adopts stockholder rights plan

Kezar Life Sciences announced that its board has unanimously rejected the previously disclosed unsolicited, non-binding proposal from Concentra Biosciences to acquire all of the outstanding shares of common stock of Kezar for cash consideration of $1.10 per share, plus a contingent value right that represents the right to receive 80% of the net proceeds from any out-license or disposition of Kezar’s development programs or intellectual property. After careful consideration and with the assistance of its independent financial and legal advisors, the board unanimously concluded that the Concentra proposal substantially undervalues the company. The proposal would result in an implied equity value for Kezar stockholders that is materially below Kezar’s available liquidity. Accordingly, the board determined that the proposal is not in the best interests of Kezar and its stockholders. In addition, in response to Concentra’s proposal and Concentra and its affiliates’ rapid accumulation of 9.9% of Kezar’s outstanding common stock, the board has adopted a limited duration stockholder rights plan, effective immediately. The rights plan does not prevent the board from engaging with parties or accepting an acquisition proposal, including from Concentra, if the board believes that it is in the best interests of Kezar and all of its stockholders. The rights plan is similar to other plans adopted by publicly held companies in comparable circumstances, and does not contain any dead-hand, slow-hand, no-hand or similar feature that limits the ability of a future board to redeem the rights. In connection with the adoption of the rights plan, the board declared a dividend of one preferred share purchase right for each outstanding share of Kezar’s common stock as of the close of business on October 28, the record date. The rights will be exercisable only if a person or group acquires or launches a tender or exchange offer to acquire beneficial ownership of 10% or more of Kezar’s outstanding common stock. Any stockholders with beneficial ownership of Kezar’s outstanding common stock above the applicable threshold as of the time of this announcement are grandfathered at their current ownership levels but are not permitted to increase their ownership without triggering the rights plan. Once the rights become exercisable, each Right will entitle its holder to purchase, for $7.16, additional shares of Kezar’s common stock having a market value of twice such exercise price. In addition, the rights plan has customary flip-over and exchange features. The rights plan will expire on October 17, 2025, unless the rights are earlier redeemed or exchanged by Kezar.