After KE Sdn. Bhd. (KE) and Titan Pharmaceuticals, Inc. (NASDAQ: TTNP) announced a merger agreement, the stock of the former saw a notable spike on US stock charts. TTNP shares surged by 79.28% to $9.00 during after-market trading, extending a 4.80% gain that occurred during regular trading hours, when the stock closed at $5.02. The deal is a key component of Titan Pharmaceuticals’ future strategy, having been authorized by the board of directors.
How Titan Pharmaceuticals Execute The Merger Agreement
A “reverse merger” comprising many stages is how Titan Pharmaceuticals and KE arranged their merger. Titan Pharmaceuticals and TTNP Merger Sub, Inc., a Delaware corporation and the sole owner of BSKE Ltd., a Cayman Islands exempted company, will first combine.
Following this, the company will emerge as the surviving entity and a direct wholly owned subsidiary of BSKE. This strategic maneuver is expected to significantly alter the corporate landscape of both entities.
Upon the filing of a proxy statement/prospectus by Titan Pharmaceuticals and BSKE, KE shareholders will have the opportunity to enter into a share exchange agreement. Those opting in will exchange their KE shares for ordinary shares of BSKE.
However, the company reserves the right to terminate the merger agreement if fewer than all KE shareholders agree to the share exchange within the stipulated timeframe.
Expected Ownership and Leadership Changes
Upon completion of the merger, the ownership structure of the combined company will see a significant shift. The existing security holders of KE and Titan Pharmaceuticals, excluding The Sire Group Ltd. (Sire) and the current directors and officers of Titan, are projected to hold approximately 86.7% and 13.3% of the outstanding shares, respectively.
Dato’ Seow Gim Shen, Chairman and CEO of Titan Pharmaceuticals, who holds 47.4% of KE’s outstanding shares and is the sole stockholder of Sire, is expected to own 48.9% of the combined company’s shares post-merger.
This ownership distribution may be subject to change due to potential dilution from financing activities associated with the merger’s closing.
