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Synta Pharmaceuticals Corp (SNTA): Billionaire Bruce Kovner Buys More Shares

Can you buy $1 for 80 cents? Stock markets rarely provide the opportunity to invest in an asset that’s worth than the net cash it carries on its books. Today, we came across a stock that trades for $0.80 for each $1 cash it holds on its books. Usually these opportunities are available when the market thinks the current management won’t take any actions that will enhance (or not destroy) shareholder returns. Last week Synta Pharmaceuticals Corp (NASDAQ:SNTA) and Madrigal announced their merger agreement. Madrigal will essentially take over the merged company, owning 64% of the outstanding shares of the entity.

Is this merger a good transaction for Synta Pharmaceuticals Corp shareholders? Billionaire Bruce Kovner thinks so. He filed an amended 13D last week disclosing additional purchases of 60K or so SNTA shares as well as his support for the merger. On the other hand, Synta’s President and CEO Dr. Paul Friedman decided to put his money on Madrigal as part of a $9 million cash infusion together with a consortium of investors. This tells me that Magrigal investors are getting the better part of this merger agreement.

Is it a good idea to follow Kovner into Synta? The merged entity which will be named Madrigal is currently valued at nearly $150 million. This seems a bit too high for a company that has only two drug candidates that are in early stages of clinical trials. There are other biotech stocks that have drug candidates at more advanced stages and trade at lower valuations.

In any case, you can find the details of Kovner’s recent filing below:

Ownership Summary Table

Name Sole Voting Power Shared Voting Power Sole Dispositive Power Shared Dispositive Power Aggregate Amount Owned Power Percent of Class
Caxton Corporation 0 12,057,869 0 12,057,869 12,057,869 8.7%
Kovner 0 340,970 0 340,970 340,970 0.2%
Kovner 0 4,000,000 0 4,000,000 4,000,000 2.9%
OB Select Opportunities 0 600,548 0 600,548 600,548 0.4%
KFO HOLDINGS 0 11,399,464 0 11,399,464 11,399,464 8.3%
Kovner, Bruce 5,443,823 16,398,839 5,443,823 16,398,839 21,842,662 15.8%

Page 1 of 12 – SEC Filing

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 21)
Synta Pharmaceuticals Corp.
(Name of Issuer)
Common Stock
(Title of Class of Securities)
87162T206
(CUSIP Number)
Mr. Heath N. Weisberg
Caxton Corporation
731 Alexander Road, Bldg. 2
Princeton, New Jersey 08540
(212) 205-6805
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
April 13, 2016
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Section 240.13d-1(e), 240.13d-1(f) or
240.13d-1(g), check the following box. | |
Note:  Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits.  See Section
240.13d-7 for other parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
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