PetMed Express (PetMed Express (PETS)) shares are trading higher Monday after activist investor SilverCape Investments publicly released a revised buyout proposal. The Singapore-based single-family office, which owns about 12% of the pet pharmacy company, is offering to buy all outstanding shares for $3 each in cash — no financing contingencies attached.
That's a roughly 70% premium over Friday's closing price of $1.76. But it's also a step down from SilverCape's original $4 per share offer back in December. The reason? The company's financial health has deteriorated significantly since then.
In an open letter to PetMed's board, SilverCape Managing Director Peter Kennedy pointed to a "material deterioration of the business." PetMed's cash position shrank from $54.7 million to $21.4 million over the last fiscal year. And in its latest 10-K filing on June 2, the company itself warned that its "financial condition may currently and in the future raise substantial doubt as to our ability to continue as a going concern."
SilverCape didn't hold back on governance either. The letter slammed the board led by Chair and Interim CEO Leslie C.G. Campbell, noting that two CEOs and two CFOs have left in just two years. Executive and board ownership sits at a mere 2% according to the latest proxy — and drops below 1% if you exclude the former CEO's shares.
"Stunning destruction" of shareholder value is how SilverCape described the board's stewardship. The stock has fallen from $32.30 in July 2021 to $1.76 on June 26, 2026. The activist argues that deteriorating operations and poor governance make selling the company the best option for shareholders.
SilverCape is calling on the board to negotiate in good faith or run a structured, independent process to evaluate other offers. "SilverCape's Proposal is the only credible option in front of stockholders that can end the ongoing destruction of value and provide them with cash for their stock," Kennedy said.
PetMed shares were up 11.08% at $1.95 at the time of publication Monday.
