ESSA Pharma to distribute $80 million to shareholders ahead of merger

SOUTH SAN FRANCISCO/VANCOUVER - ESSA Pharma Inc. (NASDAQ:EPIX), currently valued at $82.91 million with shares trading at $1.87, announced Wednesday it will return $80 million to shareholders as part of the company’s discontinuation and winding-up process.

The distribution, approved by the board following authorization from the Supreme Court of British Columbia, is scheduled for payment on August 22 to shareholders of record as of August 19.

This capital return will occur before ESSA’s special meeting on September 10, when securityholders will vote on the previously announced acquisition by XenoTherapeutics, a non-profit biotechnology company. The Court granted an interim order on August 5 authorizing this special meeting.

According to the company, shareholders are estimated to receive approximately $1.91 per common share in total, combining the distribution and cash payable upon closing of the transaction. This amount excludes any potential contingent value rights payments that shareholders may be entitled to receive through the transaction. InvestingPro data shows the company maintains strong liquidity with a current ratio of 67.17, indicating robust asset management during the wind-down process.

ESSA Pharma was previously focused on developing therapies for prostate cancer treatment. The company is now in the process of discontinuing its operations as it prepares for the acquisition by XenoTherapeutics.

The announcement comes as part of ESSA’s strategic shift, with the capital distribution representing a significant step in returning value to shareholders before the company’s business is formally wound up. According to InvestingPro analysis, ESSA appears undervalued at current levels, with additional insights available through the platform’s comprehensive financial health metrics and 7 more exclusive ProTips.

The information in this article is based on a press release statement from ESSA Pharma Inc.

In other recent news, ESSA Pharma Inc. announced its plan to seek court approval for a cash distribution to shareholders as part of its impending acquisition by XenoTherapeutics. The company will apply to the Supreme Court of British Columbia for authorization to expedite these payments before the transaction closes. This acquisition, financed by XOMA Royalty Corporation, is structured as an all-cash deal. ESSA shareholders are expected to receive approximately $1.91 per share, with an additional non-transferable contingent value right that could provide up to $0.06 more within 18 months after the transaction closes. The court approval aims to ensure shareholders receive their initial cash distribution promptly. These developments mark significant steps toward the completion of the acquisition.

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