Jounce dumps Redx Pharma for acquisition by Concentra; to cut 84% of jobs
27/03/2023 15:48
March 27 (Reuters) - Jounce Therapeutics Inc JNCE.O on
Monday agreed to be acquired by privately held Concentra
Biosciences for $96.46 million, while spurning a merger deal
with British biotech firm Redx Pharma REDX.L .
The new Concentra deal also involves a workforce reduction
of about 84% of Jounce's employees, compared to about 57% as
part of the Redx deal, Jounce said in a statement.
The deal with Concentra, which is controlled by Jounce
investor Tang Capital Partners, provides an upfront payment of
$1.85 per share to Jounce's shareholders, plus contingent value
rights of 80% of the net proceeds that come from licencing or
disposing of some Jounce assets.
Concentra Biosciences' offer price represents a 22.5%
premium over the last close. The private firm will acquire the
shares through a tender offer by April 7, Jounce said.
The Concentra deal closure, expected in the second quarter,
is subject to Jounce having at least $110 million in net cash
reserves.
Tang Capital owns a 10.2% stake in Jounce.
Jounce Therapeutics' shares rose 23% to $1.85 in morning
trade.
Redx had last month agreed to an all-stock merger with
Jounce, valuing the combined company at $425 million, and with
Jounce shareholders owning 37% of it.
Redx shares fell 11% on the London Stock Exchange after the
Jounce deal fell through on Monday, with the British company
company voicing its disappointment.
"Whilst the offer for Redx has not formally lapsed under the
UK Takeover Code, the board will consider all options available
to it in line with our strategy," Redx Chair Jane Griffiths said
in a statement.
Concentra's acquisition is expected to close in the second
quarter of 2023.
(Reporting by Khushi Mandowara in Bengaluru; Editing by Pooja
Desai)
((Khushi.Mandowara@thomsonreuters.com;))