Sources have said that a Shire's $32.5 billion acquisition of Baxalta will be announced as early as Monday.
The deal would come after Reuters first reported on Dec. 22 that Shire's latest offer for Baxalta had met the latter's valuation expectations. It would be one of the healthcare sector's largest mergers in 2016. The cash-and-stock deal will value Baxalta at around $48 per share, with a cash component just shy of $20 per share, the people said on Thursday. Baxalta shares were trading on Thursday just under $39 and Shire stock was at $190.45 a share. Both parties are confident tax concerns arising from Baxalta's spin out from Baxter International Inc (BAX.N) will not be an impediment to the transaction but are waiting for a formal legal opinion to come through before signing their merger agreement, the people added. The sources asked not to be identified because the negotiations are confidential. Shire and Baxalta declined to comment.
The acquisition would mark the culmination of a long pursuit hinged partly on how much cash Shire could offer without triggering additional taxes for Baxalta. Reuters first reported Shire’s renewed effort to court Baxalta in November. Shire has been eyeing the maker of rare disease drugs since July, when it proposed an all-stock deal for just over $45 per share that was rejected by Baxalta's board. Baxalta was initially concerned that accepting a cash offer too soon after being spun off from parent company Baxter could violate rules designed to prevent spinoffs from being used to dodge taxes. Baxalta develops biotech treatments for rare blood conditions, cancers and immune system disorders. The deal would advance Shire's strategy of building out a broad platform within the rare diseases space. In November, Shire announced a deal to acquire another rare disease drug maker, Dyax, for $5.9 billion. The deal would mark a strong start to healthcare M&A in 2016, after the sector saw it’s biggest deal making streak in history last year.
From a total of 4 analysts covering Baxalta Incorporated (NASDAQ:BXLT) stock, 3 rate it a “Buy”, 0 a “Sell”, and 1 a “Hold”. This means that 75% of the ratings are positive. The highest target price is $42 while the lowest target price is $38. The mean of all analyst targets is $40.67 which is 0.00% above today’s ($40.67) stock price.