BML Criticizes Aadi Bioscience, Inc (AADI) for Rejecting Kraken’s Offer and Urges Shareholder Rejection of Proposals
Key Summary: On December 31, 2024, BML Investment Partners (9.9%) opposed the proposed PIPE transaction, criticizing the Board for not pursuing a full company sale or asset liquidation that could have delivered over $5 per share. Instead, the Board chose "AADI 2.0," acquiring a $44 million preclinical portfolio and issuing 41.7 million shares at $2.40, giving PIPE investors 61% ownership. BML called this deal unfair and destructive to shareholder value. On January 30, 2025, BML sent a letter to the Board, and on February 3, 2025, demanded to inspect the company's records, citing concerns over the sale's financial detriment. On February 24, 2025, BML criticized the Board for rejecting Kraken’s $5.48 per share offer and urged shareholders to vote against the proposals, claiming they harmed shareholder value.
Market Cap: $67 million | Aadi Bioscience, Inc., a biopharmaceutical company, engages in developing and commercializing precision therapies for genetically defined cancers with alterations in mTOR pathway genes.
- On December 31, 2024, BML Investment Partners (9.9%) opposes the proposed PIPE transaction. While BML supports the $100 million FYARRO sale proceeds, they criticize the Board for not pursuing a full company sale or liquidating remaining assets, which could have delivered over $5 per share, a 100% return. Instead, the Board opted for "AADI 2.0," acquiring a $44 million preclinical ADC portfolio and issuing 41.7 million shares and warrants at $2.40 per share, giving PIPE investors 61% ownership despite contributing only 41.3% of capital. BML deems this deal unfair, destructive to shareholder value, and a breach of fiduciary duty. They advocate for either selling the company or returning FYARRO proceeds to legacy shareholders before pursuing the ADC strategy at a more reasonable valuation. Source
- On January 30, 2025, BML Investment Partners sent a letter to the Board indicating its belief that the proposed transactions are not in the best interests of shareholders.
- On February 3, 2025, BML Investment Partners sent a certified letter to the Board demanding to inspect the Company’s books and records, citing concerns over the decision to forgo a beneficial sale in favor of a conflicted, financially detrimental financing agreement and the sale of its main asset, while securing management's job and compensation.
- On February 24, 2025, BML Investment Partners criticized the Board for rejecting a $5.48 per share acquisition offer from Kraken in favor of a $100 million asset sale and diluting shareholders by over 60% through the issuance of new shares at $2.40 each. They urged shareholders to vote against the proposals, claiming they harmed shareholder value. Source
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