In an earlier post, we noted that Galena Biopharma’s (GALE) planned spinoff of Rxi Pharmaceutical was still awaiting approval and that the actual distribution date had yet to be determined despite a date of record being established. You can scratch that date off your calendar as the company filed an 8-K on April 10th announcing that it had rescinded the March 8th date of record, a move which left the transaction in limbo. Additionally, the company noted that because the RXi registration statement will go “stale” on April 30, 2012, “it must complete the distribution of the spin-off shares by that date or cause RXi to update the information in the registration statement by filing a post-effective amendment thereto which would have to be declared effective by the SEC.” Not good.
Just a few days later though, the company filed another 8K setting April 23, 2012 as the new date of record. Before you get too excited though, due to “the conditional nature of the dividend…[the] board of directors has not set a payment date for the distribution.” The company expects a payment date to be established no later than April 30, 2012, which just so happens to be the day when the registration statement goes ‘stale’. Even so, nothing is guaranteed to happen as the spin is ultimately “dependent upon the closing of the investment in RXi under the securities purchase agreement, dated as of September 24, 2011, among Galena, RXi and investors in RXi.” I haven’t looked back to see what the securities purchase agreement entails, but feel free to comment on this article with any insight you may have.
It looks like we are going to have to wait just a bit longer on this one although it is worth bearing in mind that there is always the possibility the entire spin off just gets cancelled. The Swiss Trader at SeekingAlpha doesn’t seem too concerned though and is still a fan of GALE spin or no spin. We will keep you updated on this situation.
Disclosure: Author holds no position in any stock mentioned.