Tender offer cashes out Kezar Life Sciences (KZR) director’s shares and options
Filing Impact
Filing Sentiment
Form Type
4
Rhea-AI Filing Summary
Kezar Life Sciences director John Franklin Fowler reported tender-offer and merger-related dispositions of his Kezar holdings. A tender offer by Aurinia Pharma U.S., Inc. and its merger subsidiary cashed out shares of Kezar Life Sciences common stock. Tendering stockholders received $6.955 per share in cash, less any tax withholding, plus one non-tradable contingent value right for each share.
The filing shows 14 dispositions, including common stock held directly and indirectly through Montebello Holdings LLC and a trust, after which the reported common stock holdings are zero. Multiple stock options with various exercise prices were disposed of to the issuer. Under the merger terms, options with exercise prices at or above the cash amount were cancelled with no payment, while in-the-money options were converted into rights to receive cash based on the spread over the cash amount plus one CVR per underlying share.
Positive
- None.
Negative
- None.
Insights
Director’s entire reported Kezar stake is cashed out or cancelled in a change-of-control deal.
The transactions reflect closing mechanics of Kezar Life Sciences’ merger with Aurinia Pharma U.S., Inc., not open-market trading. Common shares held directly and through entities were tendered for $6.955 per share in cash plus a contingent value right for each share.
All reported stock options are also terminated or converted. Out-of-the-money options, with exercise prices at or above the cash amount, are cancelled with no consideration. In-the-money options convert into cash equal to the cash amount minus the exercise price, times the shares, plus one CVR per underlying share, aligning option holders’ treatment with common stockholders.
Because these are deal-driven, issuer-structured transactions rather than discretionary buys or sells, they mainly confirm final economics for this insider at the May 11, 2026 effective time. Any future value from CVRs will depend on achieving specified milestones under the CVR agreement, as referenced in the filing.
Insider Trade Summary
14 transactions reported
Mixed
14 txns
Insider
Fowler John Franklin
Role
null
| Type | Security | Shares | Price | Value |
|---|---|---|---|---|
| Disposition | Stock Option (right to buy) | 4,893 | $0.00 | -- |
| Disposition | Stock Option (right to buy) | 17,792 | $0.00 | -- |
| Disposition | Stock Option (right to buy) | 8,896 | $0.00 | -- |
| Disposition | Stock Option (right to buy) | 22,241 | $0.00 | -- |
| Disposition | Stock Option (right to buy) | 5,000 | $0.00 | -- |
| Disposition | Stock Option (right to buy) | 5,000 | $0.00 | -- |
| Disposition | Stock Option (right to buy) | 17,499 | $0.00 | -- |
| Disposition | Stock Option (right to buy) | 19,999 | $0.00 | -- |
| Disposition | Stock Option (right to buy) | 119,999 | $0.00 | -- |
| Disposition | Stock Option (right to buy) | 49,999 | $0.00 | -- |
| Disposition | Stock Option (right to buy) | 57,999 | $0.00 | -- |
| U | Common Stock | 39,390 | $0.00 | -- |
| U | Common Stock | 375 | $0.00 | -- |
| U | Common Stock | 3,846 | $0.00 | -- |
Holdings After Transaction:
Stock Option (right to buy) — 0 shares (Direct, null);
Common Stock — 0 shares (Direct, null);
Common Stock — 0 shares (Indirect, By Trust)
Footnotes (1)
- In connection with the terms of an Agreement and Plan of Merger, dated as of March 30, 2026 (the "Merger Agreement"), by and among the Issuer, Aurinia Pharma U.S., Inc. ("Parent") and Parent's direct wholly owned subsidiary, Aurinia Merger Sub, Inc., ("Purchaser"), Purchaser completed a tender offer for shares of the Issuer's Common Stock. In exchange for each share, tendering stockholders received: (i) $6.955 per share in cash, without interest and less any applicable tax withholding (the "Cash Consideration"); plus (ii) one non-tradable contingent value right (each, a "CVR"), which represents the right to receive certain payments in cash in accordance with the terms and subject to the conditions of a contingent value rights agreement (the "CVR Agreement") (continued from footnote 1) without interest and less any applicable tax withholding, upon the achievement of specified milestones in accordance with the terms and subject to the conditions of a CVR Agreement with Broadridge Corporate Issuer Solutions, LLC, as the rights agent. After completion of the tender offer, pursuant to the terms of the Merger Agreement, Purchaser merged with and into the Issuer (the "Merger"), effective as of May 11, 2026, with the Issuer continuing as the surviving entity and a wholly owned subsidiary of Parent (the "Effective Time"). The Reporting Person is a member of Montebello Holdings LLC. The Reporting Person disclaims Section 16 beneficial ownership of the securities held by Montebello Holdings LLC, except to the extent of his pecuniary interest therein, if any, and this report shall not be deemed an admission that the Reporting Person is the beneficial owner of such securities for Section 16 or any other purpose. Pursuant to the terms of the Merger Agreement, each option to acquire shares of Issuer common stock (the "Company Stock Options") that had a per share exercise price equal to or greater than the Cash Amount (an "Out-of-the-Money Option"), was automatically cancelled and ceased to exist at the Effective Time, and no consideration was delivered in exchange for such Out-of-the-Money Option. Pursuant to the terms of the Merger Agreement, each Company Stock Option that had a per share exercise price less than the Cash Amount (an "In-the-Money Option") was automatically cancelled and converted at the Effective Time into the right to receive (A) an amount in cash, without interest, equal to the product obtained by multiplying (x) the excess of the Cash Amount over the exercise price per share underlying such Company Stock Option at the Effective Time by (y) the number of shares underlying such In-the-Money Option, subject to the terms and conditions specified in the Merger Agreement and (B) one CVR in respect of each share underlying such In-the-Money Option.
Key Figures
Tender offer cash per share: $6.955 per share
Contingent value right: 1 CVR per share
Disposition transactions: 14 transactions
+5 more
8 metrics
Tender offer cash per share
$6.955 per share
Cash consideration for each Kezar common share in tender offer
Contingent value right
1 CVR per share
Non-tradable CVR received for each share tendered
Disposition transactions
14 transactions
Total dispose-type entries in Form 4 transaction summary
Montebello indirect shares disposed
3,846 shares
Common stock held indirectly via Montebello Holdings LLC
Trust indirect shares disposed
375 shares
Common stock held indirectly via trust
Direct common shares disposed
39,390 shares
Common stock held directly and tendered
Stock option strike example
$22.8000 exercise price
Several options with 22.8000 strike disposed to issuer
High-strike option cancelled
$59.1000 exercise price
Out-of-the-money option cancelled with no consideration
Key Terms
Agreement and Plan of Merger, tender offer, Cash Consideration, contingent value right, +2 more
6 terms
Agreement and Plan of Merger regulatory
"In connection with the terms of an Agreement and Plan of Merger, dated as of March 30, 2026"
An Agreement and Plan of Merger is a formal document where two companies agree to combine into one, outlining how the process will happen. It’s like a step-by-step plan for merging, and it matters because it shows both sides have agreed on the details before the official transition takes place.
tender offer financial
"Purchaser completed a tender offer for shares of the Issuer's Common Stock"
A tender offer is a proposal made by a person or company to buy shares from existing shareholders at a set price, usually higher than the current market value, within a specific time frame. It matters to investors because it can lead to a change in ownership or control of a company, and shareholders must decide whether to sell their shares at the offered price.
Cash Consideration financial
"In exchange for each share, tendering stockholders received: (i) $6.955 per share in cash ... (the "Cash Consideration")"
Cash consideration is the actual money paid to buy a company, asset, or stake rather than payment in shares or other forms. For investors it matters because cash payments deliver immediate, certain value and affect the buyer’s and seller’s cash reserves and balance sheets—like selling a car for cash versus taking a trade-in, one side gets instant spending power while the other changes its liquidity and risk profile.
contingent value right financial
"plus (ii) one non-tradable contingent value right (each, a "CVR")"
A contingent value right is a special security that gives its holder the right to receive one or more future payments only if specified events happen, such as a product reaching a sales target or getting regulatory approval. It matters to investors because it offers potential extra payout tied to uncertain outcomes—like a bet that a project will succeed—so it can add upside to a deal while also carrying extra risk and valuation uncertainty.
Out-of-the-Money Option financial
"each option ... that had a per share exercise price equal to or greater than the Cash Amount (an "Out-of-the-Money Option")"
An out-of-the-money option is a contract to buy or sell a stock that would not be profitable if exercised right now because the agreed price is on the wrong side of the current market price (for a call, the strike is higher than the market; for a put, the strike is lower). Investors care because these options cost less and act like inexpensive bets: they can offer big percentage gains if the stock moves enough, but are more likely to expire worthless, making them useful for speculative bets or low-cost hedges — like buying a lottery-style coupon that only pays off if the price crosses a specific line.
In-the-Money Option financial
"each Company Stock Option that had a per share exercise price less than the Cash Amount (an "In-the-Money Option")"
FAQ
What did Kezar Life Sciences (KZR) stockholders receive in the tender offer?
Stockholders received $6.955 in cash per Kezar share, less any applicable tax withholding, plus one non-tradable contingent value right (CVR) for each share. The CVR provides potential future cash payments if specified milestones in the CVR agreement are achieved.
What happened to Kezar Life Sciences stock options in the Aurinia merger?
Out-of-the-money Kezar stock options were cancelled with no payment. In-the-money options were converted into rights to receive cash equal to the cash amount minus the exercise price, multiplied by underlying shares, plus one CVR per share, as specified in the merger agreement.
What is the contingent value right (CVR) mentioned in the Kezar Form 4?
The CVR is a non-tradable right to future cash payments tied to specified milestones. Each tendered Kezar share and each share underlying in-the-money options receives one CVR. Payments, if any, occur according to the terms and conditions of the CVR agreement described in the filing.
Did Kezar Life Sciences become a subsidiary after the tender offer and merger?
Yes. After the tender offer, Aurinia’s merger subsidiary merged into Kezar, with Kezar continuing as the surviving corporation. Kezar became a wholly owned subsidiary of Aurinia Pharma U.S., Inc. at the effective time of the merger on May 11, 2026.
How does the Form 4 describe John Franklin Fowler’s indirect holdings through Montebello Holdings LLC?
The filing notes Fowler is a member of Montebello Holdings LLC and disclaims Section 16 beneficial ownership of its Kezar securities, except for any pecuniary interest. This means the dispositions attributed to Montebello reflect entity-held shares rather than solely personal holdings.