Cypress shoots down Ramius offer--again

The tussle between Ramius and Cypress Bioscience continues today with the biotech responding to a Ramius offer dated Aug. 11. In its letter, Cypress rejects Ramius' latest offer, stating "it would be imprudent to start a negotiation or enter into any type of 'go shop' transaction" with the investor manager, especially given that Ramius' proposal is identical to the original one offered in July.

Last month, Ramius offered to buy all outstanding shares of Cypress it doesn't already own for $4.00 per share in cash, or $154 million. Ramius currently owns 9.9 percent of the outstanding common stock of Cypress, making it one of the company's largest shareholders.

Ramius also expressed displeasure at the Cypress' "ill-conceived acquisitions," highlighting its acquisition of Proprius--something it dubbed "a complete failure." Cypress rebuffed Ramius' overtures, saying the offer wasn't in the best interests of shareholders. The rejection came a day after another missive from Jeffrey Smith, partner managing director of Ramius, who questioned the business judgment of the board. Cypress took exception to this accusation, especially given that Smith made "several unsupported assertions regarding the decision by Cypress to discontinue the co-promotion of Savella with Forest Laboratories."

Earlier this month, Cypress announced that it is opting out of its right to co-promote the fibromyalgia drug and has decided to eliminate 123 workers--86 percent of its employees--in a restructuring aimed at drastically reducing its costs. 

"It is clear that Ramius is interested in acquiring Cypress," the company says in the latest letter.  "You are motivated to pay the lowest price possible as quickly as possible so that you can generate the highest rate of return. In contrast, our duty is to act in the best interests of the other Cypress stockholders. Your motivation and duty directly conflict with ours, and therefore, we do not believe you could be truly interested in 'a transaction that will maximize value for all shareholders' as you state in your letter," Cypress adds.

- read Cypress' release