0001144204-11-016449.txt : 20110323 0001144204-11-016449.hdr.sgml : 20110323 20110322181228 ACCESSION NUMBER: 0001144204-11-016449 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20110323 DATE AS OF CHANGE: 20110322 GROUP MEMBERS: MANGROVE CAPITAL GROUP MEMBERS: MANGROVE PARTNERS GROUP MEMBERS: NATHANIEL AUGUST SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: CPEX Pharmaceuticals, Inc. CENTRAL INDEX KEY: 0001418919 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 261172076 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-84092 FILM NUMBER: 11704862 BUSINESS ADDRESS: STREET 1: 2 HOLLAND WAY CITY: EXETER STATE: NH ZIP: 03833 BUSINESS PHONE: (603) 658-6100 MAIL ADDRESS: STREET 1: 2 HOLLAND WAY CITY: EXETER STATE: NH ZIP: 03833 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: Mangrove Partners Fund, L.P. CENTRAL INDEX KEY: 0001486623 IRS NUMBER: 272067192 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 100 W. 58TH STREET STREET 2: SUITE 8F CITY: NEW YORK STATE: NY ZIP: 10019 BUSINESS PHONE: (646) 450-0418 MAIL ADDRESS: STREET 1: 100 W. 58TH STREET STREET 2: SUITE 8F CITY: NEW YORK STATE: NY ZIP: 10019 SC 13D/A 1 v215618_sc13da.htm Unassociated Document

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.  20549
 
SCHEDULE 13D
 
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
 
(Amendment No. 5)*
 
CPEX Pharmaceuticals, Inc.
(Name of Issuer)
 
Common Stock, par value $0.01 per share
(Title of Class of Securities)
 
12620N104
(CUSIP Number)
 
 
The Mangrove Partners Fund, L.P.
10 East 53rd Street, 31st Floor
New York, New York 10022
Attention: Nathaniel August
Tel:  646.450.0418
 
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
 
Copies to:
 
John T. O’Connor
Sadis & Goldberg LLP
551 Fifth Avenue, 21st Floor
New York, New York 10176
Tel: 212.573.8029
 
March 21, 2011
(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 Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box  o.
 
Note.  Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7(b) 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 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.)
 
 
Page 1 of 7 pages
 

CUSIP No.:  12620N104

NAME OF REPORTING PERSON
   
1.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
   
 
The Mangrove Partners Fund, L.P.
   
2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
 
(a) x
 
(b) ¨
   
3
SEC USE ONLY
   
4
SOURCE OF FUNDS
   
 
WC, OO
   
5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e)  ¨
   
6.
CITIZENSHIP OR PLACE OF ORGANIZATION
   
 
Delaware

NUMBER OF
7
SOLE VOTING POWER   -   0
SHARES
    
BENEFICIALLY
8
SHARED VOTING POWER   -   149,373
OWNED BY
    
EACH
9
SOLE DISPOSITIVE POWER   -     0
REPORTING
    
PERSON WITH
10
SHARED DISPOSITIVE POWER   - 149,373

11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
   
 
149,373
   
12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES  ¨
   
13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
   
 
5.7%*
   
14
TYPE OF REPORTING PERSON
   
 
PN

*  The ownership percentage is calculated based on 2,616,936 shares of Common Stock outstanding as of January 31, 2011, as reported in the Issuer’s Definitive Proxy Statement on Schedule 14A, as filed with the Securities and Exchange Commission on February 4, 2011.
 
 
Page 2 of 7 pages
 
 
CUSIP No.:  12620N104

1
NAME OF REPORTING PERSON
 
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
   
 
Mangrove Partners
   
2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
 
(a) x
 
(b) ¨
   
3
SEC USE ONLY
   
4
SOURCE OF FUNDS
   
 
AF
   
5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e)  ¨
   
6
CITIZENSHIP OR PLACE OF ORGANIZATION
   
 
Cayman Islands

NUMBER OF
7
SOLE VOTING POWER   -   0
SHARES
    
BENEFICIALLY
8
SHARED VOTING POWER   -   149,373
OWNED BY
    
EACH
9
SOLE DISPOSITIVE POWER   -   0
REPORTING
    
PERSON WITH
10
SHARED DISPOSITIVE POWER   -   149,373

11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
   
 
149,373
   
12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES ¨
   
13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
   
 
5.7%*
   
14
TYPE OF REPORTING PERSON
   
 
OO

*  The ownership percentage is calculated based on 2,616,936 shares of Common Stock outstanding as of January 31, 2011, as reported in the Issuer’s Definitive Proxy Statement on Schedule 14A, as filed with the Securities and Exchange Commission on February 4, 2011.
 
 
Page 3 of 7 pages
 
 
CUSIP No.:  12620N104

1
NAME OF REPORTING PERSON
 
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
   
 
Mangrove Capital
   
2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
 
(a) x
 
(b) ¨
   
3
SEC USE ONLY
   
4
SOURCE OF FUNDS
   
 
AF
   
5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e)  ¨
   
6
CITIZENSHIP OR PLACE OF ORGANIZATION
   
 
Cayman Islands

NUMBER OF
7
SOLE VOTING POWER   -   0
SHARES
    
BENEFICIALLY
8
SHARED VOTING POWER   -   149,373
OWNED BY
    
EACH
9
SOLE DISPOSITIVE POWER   -   0
REPORTING
    
PERSON WITH
10
SHARED DISPOSITIVE POWER   -  149,373

11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
   
 
149,373
   
12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES o
   
13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
   
 
5.7%*
   
14
TYPE OF REPORTING PERSON
   
 
OO

*  The ownership percentage is calculated based on 2,616,936 shares of Common Stock outstanding as of January 31, 2011, as reported in the Issuer’s Definitive Proxy Statement on Schedule 14A, as filed with the Securities and Exchange Commission on February 4, 2011.
 
 
Page 4 of 7 pages
 
 

CUSIP No.:  12620N104

1
NAME OF REPORTING PERSON
 
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
   
 
Nathaniel August
   
2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
 
(a) x
 
(b) ¨
   
3
SEC USE ONLY
   
4
SOURCE OF FUNDS
   
 
AF
   
5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e)  ¨
   
6
CITIZENSHIP OR PLACE OF ORGANIZATION
   
 
Cayman Islands

NUMBER OF
7
SOLE VOTING POWER   -   0
SHARES
    
BENEFICIALLY
8
SHARED VOTING POWER   -   149,373
OWNED BY
    
EACH
9
SOLE DISPOSITIVE POWER   -   0
REPORTING
    
PERSON WITH
10
SHARED DISPOSITIVE POWER   -  149,373

11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
   
 
149,373
   
12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES o
   
13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
   
 
5.7%*
   
14
TYPE OF REPORTING PERSON
   
 
IN

*  The ownership percentage is calculated based on 2,616,936 shares of Common Stock outstanding as of January 31, 2011, as reported in the Issuer’s Definitive Proxy Statement on Schedule 14A, as filed with the Securities and Exchange Commission on February 4, 2011.
 
 
Page 5 of 7 pages
 
 
Explanatory Note

This Amendment No. 5 to Schedule 13D (this “Amendment No. 5”) is being filed with respect to the beneficial ownership of common stock, par value $0.01 per share (the “Common Stock”), of CPEX Pharmaceuticals, Inc., a Delaware corporation (the “Issuer” or the “Company”).  This Amendment No. 5 supplements Items 4 and 7 of the Schedule 13D (as amended) originally filed on January 31, 2011.

ITEM 4. 
Purpose of Transaction.

On March 21, 2011, Mangrove Partners issued a press release expressing its disappointment in the Issuer’s board of directors failing to seriously consider the dividend recapitalization proposed by Mangrove Partners.  A copy of the March 21, 2011 press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference. On March 22, 2011, Mangrove Partners issued a press release questioning the Issuer’s desperate plea to stockholders asking them to support a merger that will pay the Issuer’s management over $7 million.  A copy of the March 22, 2011 press release is attached hereto as Exhibit 99.2 and is incorporated herein by reference. The descriptions herein of the March 21, 2011 and March 22, 2011 press releases are qualified in their entirety by reference to such press releases.

ITEM 7. 
Material to be Filed as Exhibits.

Exhibit No. 
Document

 
99.1
Press Release, dated March 21, 2011
 
 
99.2
Press Release, dated March 22, 2011
 
 
 
Page 6 of 7 pages
 
 
SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Dated:  March 22, 2011

 
THE MANGROVE PARTNERS FUND, L.P.
 
MANGROVE PARTNERS
 
MANGROVE CAPITAL
       
 
By:
/s/ Nathaniel August
  
 
Nathaniel August, for himself, as Director of Mangrove Capital (for itself and The Mangrove Partners Fund, L.P.) and as a Director of Mangrove Partners
  


 
Page 7 of 7 pages
 

EXHIBIT INDEX

Exhibit No.
Document

99.1
Press Release, dated March 21, 2011
 
99.2
Press Release, dated March 22, 2011
 


 
 
 
 
EX-99.1 2 v215618_ex99-1.htm Unassociated Document
Exhibit 99.1
 
MANGROVE PARTNERS EXPRESSES DISAPPOINTMENT IN BOARD OF CPEX PHARMACEUTICALS, INC. AND REAFFIRMS PROPOSED RECAPITALIZATION AND INTENTION TO VOTE AGAINST MERGER

GLASS LEWIS RECOMMENDS STOCKHOLDERS VOTE AGAINST MERGER

New York, New York – March 21, 2011 – Mangrove Partners, owners of 149,373 shares representing approximately 5.71% of the outstanding shares of CPEX Pharmaceuticals, Inc (NASDAQ: CPEX), today expressed its deep disappointment in the Board of Directors of CPEX for failing to  seriously consider the dividend recapitalization proposed by Mangrove Partners. Mangrove Partners is confident that should the Board return just one of Mangrove’s many phone calls it would lead to a negotiated agreement delivering a superior outcome to stockholders. Indeed, Mangrove called CPEX multiple times last week to discuss the recapitalization but never received a reply. Mangrove remains committed to finding a better alternative for stockholders than the currently proposed merger between CPEX and FCB I, stands behind its fully-financed dividend recapitalization proposal, and is prepared to immediately enter into negotiations.  Unfortunately it appears the CPEX board and management are only truly committed to their over $7 million in change of control payments.

Commenting on CPEX’s actions, Nathaniel August, Director of Mangrove Partners, said “This is just one more instance of the Board serving management’s best interests and not stockholders. Unfortunately, management’s myopic focus on capturing their enormous change of control payments has resulted in the Board rejecting our proposal out of hand without even bothering to ask us a single question or enter into negotiations.”

With regards to the merger, Nathaniel August commented “We are heartened that our skepticism towards the merger appears widespread and that the stock has been consistently trading above the merger price since we approached the Board with the recapitalization proposal. We have been contacted by many other stockholders who believe in the proposed recapitalization and who have expressed their desire to see it implemented. Based on these expressions, we believe that stockholders should be prepared to see the merger fail. In the event the merger fails, it is our intention to again approach the Board with the recapitalization proposal.”

Mangrove also notes that Glass Lewis, a leading independent proxy advisory firm, has recommended that stockholders vote against the Footstar offer for CPEX. On the Board’s process Glass Lewis remarks:

“…we are unconvinced the board’s process, however broad, secured full and fair value for CPEX shareholders.  Indeed our analyses suggest the per share price offered by Footstar and its affiliates falls well short of the value shareholders might reasonably expect in exchange for forfeiting their interest in what amounts to a long-lived annuity.”

The Glass Lewis report goes on to state:

“Our concerns about the deal’s financial terms are buttressed by the board’s failure to provide shareholders with clear, reliable analyses to support the per share sales price.  In place of a comprehensive independent review, CPEX offers shareholders an extremely brief fairness opinion by RBC, which relies primarily on a flawed sum-of-the-parts analysis.”

“Based on these factors, we believe shareholders should reject the proposed transaction with Footstar.”

Mangrove Partners intends to vote against the merger and continues to believe better alternatives are available to shareholders, most notably the fully-financed dividend recapitalization it has presented to CPEX’s Board of Directors.

Investors with questions concerning our reasons for voting against the merger should call Steven C. Balet or Geoff Sorbello at Okapi Partners LLC, which is advising Mangrove Partners, toll free at 1-877-285-5990.


 
 
 
EX-99.2 3 v215618_ex99-2.htm Unassociated Document
Exhibit 99.2
 
MANGROVE PARTNERS NOTES CPEX STOCK TRADING ABOVE OFFER PRICE

New York, New York – March 22, 2011 – Mangrove Partners, owners of 149,373 shares representing approximately 5.71% of the outstanding shares of CPEX Pharmaceuticals, Inc (NASDAQ: CPEX), questions  CPEX’s apparent desperate  plea to stockholders asking them to support a merger that will pay management over $7 million dollars, or approximately 10% of the total deal compensation. Mangrove Partners further notes that CPEX’s stock price has been trading consistently above the offer price, with more than 75% of shares traded this month having transacted above the offer price of $27.25 per share.

With regards to CPEX’s press release, Nathaniel August, Director of Mangrove Partners, remarked “We are disappointed that CPEX continues to spend stockholders’ money on overnight mailings and PR firms to support a merger which we believe undervalues CPEX. The market seems to agree with our assessment as the stock has consistently traded above the deal price for most of March. At this point it seems that stockholders can do better than the deal price by simply selling their shares in the market. The antics of management seem to be  nothing more than a last ditch effort to capture gigantic change of control payments for themselves  by scaring small stockholders into an alternative that is clearly worse than the current market price offered for their shares.”

Mangrove Partners has voted against the merger and continues to believe better alternatives are available to stockholders, most notably the fully-financed dividend recapitalization it has presented to CPEX’s Board of Directors and which it intends to present to CPEX again immediately after stockholders officially vote down the merger.

Investors with questions concerning our reasons for voting against the merger should call Steven C. Balet or Geoff Sorbello at Okapi Partners LLC, which is advising Mangrove Partners, toll free at 1-877-285-5990.