Investor Group Issues Letter to Sesen Bio’s Board of Directors Regarding Intent to Vote AGAINST Proposed Carisma Merger

Rhea-AI Summary

Investor Group owning approximately 8.4% of Sesen Bio urges the Board to hold a stockholder vote regarding the proposed merger with Carisma Therapeutics. The group opposes the merger, questioning the Board's judgment and commitment to stockholders' interests. They demand transparency on Carisma's valuation, incurred fees, and capital investment. The group believes the transaction favors advisors and Carisma at the expense of Sesen Bio's stockholders and calls for an immediate vote to resolve the Board's future.

Positive

• None.

Negative

• Investor Group opposes the merger with Carisma, indicating a lack of confidence in the Board's decision-making.
• Concerns over the financial implications of the merger due to the perceived overvaluation of Carisma.
• Investor Group requests clarity on transaction-related fees, suggesting potential financial burdens on Sesen Bio.
• The Board's lack of stock ownership raises questions about their alignment with stockholder interests.

Calls on Board to Stop Wasting Corporate Resources and Hold a Stockholder Vote as Soon as Possible

Questions the Board’s Apparent Desire to Keep Stockholders in the Dark on Key Details

HOUSTON--(BUSINESS WIRE)-- Bradley L. Radoff and Michael Torok (together with their affiliates, the “Investor Group” or “we”), who own approximately 8.4% of the outstanding common stock of Sesen Bio, Inc. (Nasdaq: SESN) (“Sesen Bio” or the “Company”), today issued the following open letter to the Company’s Board of Directors (the “Board”) regarding the proposed merger with Carisma Therapeutics Inc. (“Carisma”):

Members of the Sesen Bio Board,

The Investor Group remains adamantly opposed to Sesen Bio’s proposed merger with Carisma. Last week’s announcement of amended merger terms and yesterday’s press release only reinforce our view that you are an inexperienced, misaligned Board that appears blindly committed to an ill-conceived transaction. It is equal parts ironic and frightening to us that you believe offering Sesen Bio up as a merger partner to a cash-starved, overvalued private company reflects a robust review of strategic alternatives. Moreover, it is confounding that you still deem the transaction to be in stockholders’ best interest, particularly in light of the poor market reaction and your collective lack of ownership of Sesen Bio shares.

We urge the Board to stop wasting corporate resources and hold a stockholder vote as soon as possible. We view the vote on the pending merger as a referendum on your stewardship, meaning we expect all Board members who continue to support the deal to resign if the transaction is voted down by stockholders.

Ahead of a near-term vote, the Board should make the following information available to the Company’s stockholders:

1. An updated fairness opinion on Carisma’s valuation that includes a detailed explanation justifying Sesen Bio’s investment in Carisma at a seemingly absurd valuation despite the massive decline in comparable company valuations that were included in the original fairness opinion.
   
   
2. The total transaction-related professionals’ fees/bonuses incurred to date and potentially owed by the Company in the event the transaction goes through.
   
   
3. Clarity on how much capital is being invested at the $350 million valuation currently attached to Carisma. While your communications stress the quality of Carisma’s management team and investors, we continue to wonder why Sesen Bio’s stockholders are slated to contribute the majority of the capital.

At this point in time, it looks to us like the transaction being championed by the Board will benefit Sesen Bio’s advisors and Carisma at the direct expense of the Company’s stockholders. This remains unacceptable to us. We continue to believe it is in the best interest of Sesen Bio stockholders, the true owners of the Company, to terminate the merger agreement. Short of that, we urge the Board to minimize all expenses and hold a stockholder vote as soon as possible.

We look forward to your prompt and direct responses to our information requests.

Sincerely,

Bradley L. Radoff

Michael Torok

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20230105005420/en/

Longacre Square Partners

Greg Marose / Charlotte Kiaie, 646-386-0091

gmarose@longacresquare.com / ckiaie@longacresquare.com

Source: On behalf of Bradley L. Radoff

FAQ

What is the main concern of the Investor Group regarding the Sesen Bio and Carisma merger?

The Investor Group opposes the merger due to perceived misalignment and lack of transparency from the Sesen Bio Board.

What percentage of Sesen Bio's stock do the opposing investors own?

The Investor Group owns approximately 8.4% of Sesen Bio's outstanding common stock.

What specific information does the Investor Group request from the Board?

They request an updated fairness opinion on Carisma, details on transaction-related fees, and clarity on capital investment.

What is the proposed valuation of Carisma in the merger?

The merger values Carisma at approximately $350 million.

What actions does the Investor Group advocate for the Sesen Bio Board?

They urge the Board to hold a stockholder vote on the merger and to resign if the transaction is voted down.