Celgene Corporation (NASDAQ: CELG) is having an incredibly strong start to the trading session this morning, and for good reason. Early this morning, news broke that the company would be acquired. Of course, the news excited investors, sending the stock screaming for the top. Today, we’ll talk about:
- The acquisition news;
- what we’re seeing from CELG stock as a result; and
- what we’ll be watching for ahead.
CELG To Be Acquired By BMY
As mentioned above, Celgene Corporation is having an incredibly strong day in the market today after announcing that it has entered into a definitive merger agreement. Under the terms of the merger agreement, Bristol-Myers Squibb will acquire the company in a cash and stock transaction that comes with a total value of approximately $74 billion.
According to the terms of the agreement, those who currently own CELG shares will receive 1 share of BMY stock and $50 cash for each share owned. Shareholders will also be paid one tradeable Contingent Value Right for each share owned. This will entitle the holder to receive a payment for the achievement of future regulatory milestones.
In the release, the company’s said that their Boards of directors have unanimously approved the transaction. Upon the close of the transaction, BMY shareholders will own approximately 69% of the combined company with CELG shareholders owning approximately 31%.
In a statement, Giovanni Caforio, M.D., Chairman and CEO at BMY, had the following to offer:
Together with Celgene, we are creating an innovative biopharma leader, with leading franchises and a deep and broad pipeline that will drive sustainable growth and deliver new options for patients across a range of serious diseases… As a combined entity, we will enhance our leadership positions across our portfolio, including in cancer and immunology and inflammation. We will also benefit from an expanded early- and late-stage pipeline that includes six expected near-term product launches. Together, our pipeline holds significant promise for patients, allowing us to accelerate new options through a broader range of cutting-edge technologies and discovery platforms.
We are impressed by what Celgene has accomplished for patients, and we look forward to welcoming Celgene employees to Bristol-Myers Squibb. Our new company will continue the strong patient focus that is core to both companies’ missions, creating a shared organization with a goal of discovering, developing and delivering innovative medicines for patients with serious diseases. We are confident we will drive value for shareholders and create opportunities for employees.
The above statement was followed up by Mark Alles, Chairman and CEO at CELG. Here’s what he had to say:
For more than 30 years, Celgene’s commitment to leading innovation has allowed us to deliver life-changing treatments to patients in areas of high unmet need. Combining with Bristol-Myers Squibb, we are delivering immediate and substantial value to Celgene shareholders and providing them meaningful participation in the long-term growth opportunities created by the combined company… Our employees should be incredibly proud of what we have accomplished together and excited for the opportunities ahead of us as we join with Bristol-Myers Squibb, where we can further advance our mission for patients. We look forward to working with the Bristol-Myers Squibb team as we bring our two companies together.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to work in the market is that the news leads to moves. When it comes to Celgene, the news proved to be overwhelmingly positive. After all, the acquisition will return substantial value to shareholders as it comes with an incredible premium. So, it’s not surprising to see that excited investors are pushing the stock on a run for the top. As is normally the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (8:22), CELG is trading at $88.24 per share after a gain of $21.60 per share or 32.41% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the iWatch Markets team will continue to keep a close eye on CELG. In particular, we’re interested in following the story surrounding the acquisition. While the agreement is a definitive one that has been approved by both Boards of Directors, the transaction is still subject to customary closing conditions as well as regulatory approval. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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