Major Shareholders Criticize Enzon Pharmaceuticals Management Team in Open Letter
NEW YORK, January 30, 2009 /PRNewswire/ -- On January 28, 2009, Knott Partners and affiliated funds, which own approximately 1.8 million shares of outstanding common stock of Enzon Pharmaceuticals, sent the following letter to the company. The letter, addressed to Enzon CEO Jeffrey Buchalter as well as the Board of Directors, expresses the investor group's serious concerns about Enzon's management, strategy and share price. It proposes four steps the company should take in the immediate future to rebuild its market value and reputation.
The full text of the letter to Enzon Pharmaceuticals is below. For more information, please contact Pat Eaton-Buettner at Knott Partners at (516) 364-0303 or . PBuettner@knottpartners.com
Dear Mr. Buchalter:
Entities managed by Dorset Management/Knott Partners are significant shareholders of Enzon Pharmaceuticals ("Enzon" or the "Company"), currently owning approximately 1.8 million shares of common stock. We write to express our concerns regarding the direction of the Company.
Over the past five years, ENZN's stock price has been a huge disappointment to shareholders. While we applaud certain of management's initiatives, such as monetizing part of the royalty stream and licensing pharmaceutical programs, the stock has declined from a high of more than $17 in 2004 to its recent price of approximately $6.60 (after plunging below $4 last November). At the same time, the Company's board has seen fit to compensate management very handsomely over this same time period.
In our opinion, Enzon continues to trade at a deep discount to its actual value as a consequence of multiple missteps by management. A non-exhaustive list includes:
Steps must be taken to remedy these past missteps, improve the Company's business and prospects, and ultimately elevate shareholder value. Among other things, we believe that Enzon's current board should consider the following steps to increase shareholder value:
We would recommend the above steps be taken immediately if not sooner. We intend to hold management and the board of directors accountable for these items, as well as any additional management missteps. We will take whatever measures are necessary to protect and enhance shareholder value. We are available to discuss these matters further at your convenience.
CONTACT: Pat Eaton-Buettner of Knott Partners, +1-516-364-0303, PBuettner@knottpartners.com
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Posted: January 2009