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Delcath Systems Management: Activist Firm Calls for Sale of Company to Strategic Buyer
Delcath Systems Management: Activist Firm Calls for Sale of Company to Strategic Buyer, Ending of Excessive Compensation & Shareholder Dividends - Believes Company Worth in Sum of Parts Calculation $10-12 or more per share with Restructuring or Sale
By: Linkedto Partners
Delcath Systems Management: Activist Firm Calls for Sale of Company to Strategic Buyer, Ending of Excessive Compensation & Dividends to Shareholders - Believes Company Worth in Sum of Parts Calculation $10-12 or more per share with Restructuring or Sale.
Dear Delcath Management & Investors:
Linkedto Partners (A firm specializing in value investing & activist situations) control 65,325 shares of Delcath System's (DCTH) common stock. The company currently holds $3.31 in cash per share - yet it's share price has been floundering recently at between $1.90-$2.62 and they admitted to losing about $11 million in the first half of 2014 (http://www.bizjournals.com/
We believe the best possible way for Delcath Systems to achieve it's full potential value is to push for an immediate sale of the company to a strategic big pharma buyer in the U.S. Or Europe. The company has a strong cash position, products selling in Europe, and an orphan drug designation. Delcath Systems we believe is much better suited inside a large pharma company than as a standalone firm.
Yet Delcath Systems paid out over $24 million in executive compensation between the years of 2009-2013 and we believe Delcath has not cut their executive pay enough moving forward. (http://insiders.morningstar.com/
We also have seen years of excessive compensation causing big expenses for this company which has useful products approved in Europe but not yet approved in the U.S.
Delcath having so much in cash should make some returns to shareholders instead of egregious executive compensation compared to the market cap of the company.
We are attaching a chart of the stock price from 2007-2014. Delcath Systems is trading at or near all time lows, while markets over the past few years have marched a lot higher. Delcath Systems should immediately seize the moment & sell the company for a significant premium to it's current price to a strategic buyer looking to add on valuable products to it's portfolio. In the meantime, Delcath Systems should create a plan to return back cash to shareholders and vastly cut executive salaries until progress on returning value to shareholders is achieved.
Contact: Jon Sanders