SOBI plummets on offer to buy CTI BioPharma

CTI Biopharma

10/05/2023 11:15

(Updates)
** Shares of Swedish Orphan Biovitrum (SOBI)  SOBIV.ST  slump as
much as 17% after the drugmaker made a $1.7 billion cash offer
to buy U.S. biopharmaceutical firm CTI Biopharma  CTIC.O  
    ** SOBI said it would make a tender offer for $9.10 per CTI
share, a premium of 89% over Tuesday's closing price of $4.82
    ** RBC says that while the acquisition should strengthen
SOBI's haematology franchise, the purchase premium is
significant, though within peer multiples in the rare disease
space
    ** The brokerage adds that the equity component of the
transaction may initially be perceived negatively
    ** SOBI said the planned deal is fully funded through debt
financing, up to half of which is expected to be refinanced
through a rights issue
    ** Carnegie analyst Erik Hultgard says that there seems to
be "some concern in the market that the transaction will be
funded by equity"
    ** "Following the proposed deal today, and commitments by
main owner Investor, it is unlikely that Sobi will be approached
 again any time soon," he adds 
    ** The stock is on track for its worst day since December
2021 and sits at the bottom of the pan-European STOXX 600
 .STOXX  index

 (Reporting by Elviira Luoma)
 ((Elviira.luoma@thomsonreuters.com))