Neurogen Corp (NRGN)

[surf1944]

8:33AM Ligand Pharma to acquire Neurogen for stock and contingent value rights (LGND) 2.76 : Ligand Pharmaceuticals (LGND) and Neurogen (NRGN) announced they have entered into a definitive merger agreement under which Ligand will acquire Neurogen. Under the transaction, Neurogen stockholders will receive an estimated $11 mln in Ligand common stock and will be granted Contingent Value Rights ("C.V.Rs") under four C.V.R agreements. The C.V.Rs would entitle Neurogen shareholders to cash payments for the sale or licensing of certain assets and the achievement of a specified clinical milestone. -- Under the terms of the agreement, Ligand will issue to Neurogen stockholders shares of Ligand common stock with an aggregate market value of approximately $11 mln, subject to certain conditions relating to the price of Ligand's shares and as adjusted to reflect Neurogen's net cash balance, in each case as measured shortly before closing. At the last market price (August 21, 2009) this would result in Ligand issuing approximately 4.0 mln shares, or 0.06 shares for each outstanding Neurogen share such that Neurogen stockholders would own approximately 3% of the combined company. This implies a purchase price of $0.16 per common share of Neurogen, in addition to the potential for cash consideration to be paid under each of four C.V.R agreements described below. With the acquisition of Neurogen, Ligand projects its cash balance to increase by approximately $7 mln taking into account payment of transaction and wind-down costs and the repayment of Neurogen's debt.