August 08, 2023 | Health Care | North America | Ended

Reata Pharmaceuticals / Biogen: Deal Insightss

Biotechnology company Biogen announced on 28-Jul-23 that it intends to buy Texas-based rare disease specialist Reata Pharmaceuticals for $172.50 per share in cash, implying a 58.9% premium to the previous day’s closing price. Both boards support the deal, which is expected to close in 4Q’23, against a long-stop date of 28-Jan-24. Conditions to closing include HSR clearance and approval by Reata shareholders; Biogen shareholder approval is not required. The preliminary merger proxy is expected within ten business days (by 11-Aug-23), and the target shareholder meeting will be held within 30 days from the initial mailing of the definitive proxy. The deal is not subject to financing, and despite $7.3bn of cash on its balance sheet, Biogen said it will fund the acquisition through cash and new debt, through a senior unsecured bridge loan for $1.5bn from JPMorgan. The merger agreement contains customary clauses on representations, warranties, and covenants, with MAC carve-outs for pandemic and war. A burdensome condition makes specific reference to Reata’s Skyclarys (omaveloxolone) drug, which is ...

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