Sinovac Clears Legal Hurdle In Control Battle, Moves Forward With $55 Dividend

Sinovac Biotech saw a sharp uptick in retail investor interest late Sunday after the company disclosed a legal win that paves the way for a $55 per share special cash dividend, payable on July 7.

The U.S. District Court for the Southern District of New York denied a petition for emergency injunctive relief filed by Advantech/Prime Success, a member of the so-called“Dissenting Investor Group” that includes Vivo Capital. 

The group had sought to block the current board from executing the dividend payout, which follows a broader dispute over corporate control and the legitimacy of prior board actions.

The court ruling clears a major legal obstacle for the current Sinovac Board, which was installed following a Privy Council order and proceedings under Antiguan law. 

The board now has a clear path to disburse the $55 dividend through its designated paying agent.

In a statement, Sinovac said that if it succeeds in separate legal proceedings in Antigua to cancel disputed Private Investment in Public Equity (PIPE) shares issued by the previous board, it intends to distribute an additional $11 per share to valid shareholders.

Sinovac accused the dissenting group of deploying“multi-pronged lawfare” to prevent valid shareholders from receiving dividends unless PIPE shares, which the current board deems invalid, were included. 

According to Sinovac, over $1 billion has already been paid to the dissenting group via a Sinovac operating unit.

The board has placed the pro rata portion of dividend funds for disputed PIPE shares in escrow, pending the outcome of the ongoing litigation.

In parallel, Sinovac is preparing for a special shareholder meeting on July 8, at which investors will vote on two proposals to replace the current board. 

The company urged shareholders to vote“against” both proposals and to support the existing leadership.

On Stocktwits, retail sentiment was 'neutral' amid 'high' message volume.

Sinovac's shares remain halted from trading on Nasdaq and have not changed hands since February 2019. 

The trading suspension followed prolonged governance disputes, including contested PIPE share issuances and competing board claims. 

Although recent court rulings have favored the current board and cleared the way for a planned dividend payout, the company has not announced a timeline for resuming trading or disclosed whether it has met Nasdaq's requirements for relisting.

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