Biotech Values

[DewDiligence]

AKBA acquires KERX in all-stock “merger of equals”—both stocks are down today:

https://finance.yahoo.com/news/akebia-therapeutics-keryx-biopharmaceuticals-merge-110000973.html

Under the terms of the agreement, Keryx shareholders will receive 0.37433 common shares of Akebia for each share of Keryx they own. The exchange results in implied equity ownership in the combined company of 49.4 percent for Akebia shareholders and 50.6 percent for Keryx shareholders on a fully-diluted basis. John P. Butler, President and Chief Executive Officer of Akebia, is expected to lead the combined company… The transaction is expected to close by the end of 2018, subject to the satisfaction of customary closing conditions, including clearance by antitrust authorities and approval by the shareholders of both companies.

Based on AKBA’s closing price yesterday of $10.48, the deal is worth only $3.885/sh for KERX shareholders—a 13% discount to KERX’s close yesterday. But the actual deal terms for KERX are much worse insofar as AKBA is -17% as I’m typing. It’s hard to see how this deal gets shareholder approval in its current form.