PDL BioPharma shareholder SevenSaoi issues letter to board

PDL BioPharma shareholder Capital, with 2,590,198 shares of common stock, has delivered a letter to the Board of Directors of PDL. The letter addresses SevenSaoi’s “serious concerns with the company’s failed acquisition strategy” and calls upon the Board to authorize a large share repurchase. The letter states, among other things: “PDL is grossly overcapitalized – the company currently has $375M in cash, an additional $400M+ in expected royalty cash flow through 2022, and low working capital requirements. As a percent of market capitalization, PDL’s cash balance is currently 7.6x that of its median peer and 2.2x that of the most overcapitalized peer (…) : PDL’s share price discount persists in large part due to investor concern that PDL’s massive cash balance will be deployed in expensive acquisitions that destroy shareholder value (…) management’s, and especially Mr. McLaughlin’s, poorly-devised compensation scheme includes massive incentives for them to make acquisitions, to the exclusion of other productive and value enhancing uses of capital, such as share repurchases.”
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