Astrotech board rejects unsolicited acquisition proposal from BML Investment

Astrotech announced that its board of directors has unanimously rejected the unsolicited acquisition proposal from BML Investment Partners, received on June 26, to acquire all of the outstanding shares of common stock of the company for $17.25 per share in cash. After a thorough review, in consultation with management and its legal advisors, the board unanimously determined to reject the proposal because it is not in the best interest of the company’s stockholders for the following reasons:. “The Proposal is Opportunistic and Significantly Undervalues the Company. The Board believes that the Proposal significantly undervalues the Company and prioritizes the short-term gain of BML at the expense of the Company’s stockholders. The Board believes the Proposal is an opportunistic attempt by BML to purchase the Company’s shares at a discounted price that significantly undervalues the Company’s business. The offer price of $17.25 per share represents a significant 34% discount to the per share value of the Company’s cash and short term investments as of March 31, 2023. The cash and short-term investments represent the Company’s primary liquidity source for funding the development of its products and execution of its long-term business strategy. The offer price represents a more than $10 million discount to cash for which BML is expecting to benefit to the detriment and disregard of our shareholders. The offer price represents an even greater discount when considering the value of the Company’s key mass spectrometry technology that is the foundation of our current and future products, and therefore does not reflect the Company’s true intrinsic value or prospects. The Company has continued to drive stockholder value by expanding its offerings in existing and new markets to capitalize on opportunities for new business.” The Board believes that the Company’s stockholders will best be served by the Company continuing to pursue its long-term business strategy because the Board believes that the long-term value of the Company is greater than the short-term liquidation or sale value represented by the Proposal. As a result, the Proposal would deny the Company’s stockholders the full benefits of the Company’s developing business opportunities in bringing products to market and its overall growth strategy. For example, the Proposal does not take into account the successful results of the AgLAB Maximum Value Process(TM) method (AgLAB subsidiary) or the recent purchase order for 17 TRACER 1000 systems (1st Detect subsidiary). The partnership with Cleveland Clinic to develop the BreathTest-1000TM (BreathTech subsidiary) is another project that has the potential to create long-term value. The Board believes that BML’s aim is to realize a short-term gain at the expense of the Company’s other stockholders. The Board believes that BML’s strategy of potentially liquidating the Company, as stated in BML’s Schedule 13D, would result in unfair profits to BML at the expense of all other stockholders because the offer price of $17.25 per share is significantly less than the per share value of the Company’s cash and short-term equivalents. Consistent with its history involving other public companies, the Board believes BML is targeting Astrotech for liquidation because the market value of Astrotech’s common stock is less than the book value of its cash and short-term investments. If BML were to acquire the Company at $17.25 per share (excluding shares directly held by BML), BML would expend an aggregate $25 million for the remaining 87% of Company shares that it does not own, and BML would then own 100% of a Company with a value of $26.17 per share, based solely on the book value of the cash and short-term investments as of March 31, 2023. If BML were then to liquidate the Company shortly thereafter, BML would realize a gain on all of its shares that would represent a significant premium over what all other stockholders would receive based on the Proposal, to the sole benefit of BML. The Proposal states that BML has funds “readily available” to close a transaction but provides no details or evidence of any financing commitments, sources, methods, discussions or other customary disclosure regarding how BML plans to fund over $25 million in cash consideration.The Company’s Board is committed to delivering long-term value to stockholders by executing on its strategic business plans and growing the Company’s mass spectrometry technology and business lines. The Board will continue to work on behalf of stockholders to grow Astrotech’s business and generate increasing value for its stockholders generally over the limited opportunistic interests of the few.”