Posted in General 
August 21st, 2008

Thermage, Inc. (Nasdaq: THRM) is seeing a sharp spike in trading volume this morning followed by a sharp gain in the stock.  The company announced that it has received a revised unsolicited, non-binding proposal from a third party for an alternative transaction to Thermage’s pending merger with Reliant Technologies, Inc.

The unsolicited and non-binding proposal calls for the acquisition of Thermage at a price of $5.50 per share in cash or a combination of cash and stock, subject to due diligence and negotiation of a definitive agreement.

The company said its Board of Directors will consider the proposal in a manner consistent with its fiduciary duties and obligations under its merger agreement with Reliant. Following its review of the proposal, Thermage’s board will respond in due course.  What is interesting about this is that the merger agreement with Reliant prohibits Thermage from entering into discussions with a third party concerning an alternative transaction UNLESS Thermage’s Board of Directors reasonably determines in good faith that the acquisition proposal constitutes or is reasonably likely to lead to a superior proposal and that the failure to take such action would reasonably be expected to be a breach of its fiduciary duties under Delaware law.

Shares closed yesterday at $3.02 and now shares are up 42% at $4.39 pre-market at 9:00 AM EST on about 23,000 shares.  Its market cap before the pre-market pop was merely $72.6 million.  Average daily volume is only 76,000 shares.

Jon C. Ogg
August 21, 2008

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