What happened
Shares of Eidos Therapeutics (EIDX +0.00%) were skyrocketing 41.1% higher as of 11:50 a.m. EDT on Monday. The huge gain came after BridgeBio Pharma (BBIO 0.98%) announced plans to acquire Eidos.
So what
BridgeBio already owns a major stake in Eidos. It's now seeking to buy the remaining 36.3% of Eidos' outstanding shares. The most important thing for Eidos shareholders, of course, is the attractive price tag of the deal. BridgeBio plans to fully acquire Eidos for a 41% premium above the closing price of the biotech stock on Oct. 2, 2020.
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Eidos shareholders have a choice in the proposed acquisition deal. They can either receive 1.85 shares of BridgeBio stock or $73.26 in cash for every share of Eidos they own.
Neil Kumar, CEO of both BridgeBio and Eidos, said the proposed acquisition transaction "removes the operational complexity of the current ownership structure." He also thinks the deal makes sense right now as preparation is beginning for a potential global launch of Eidos' drug acoramidis, which is being evaluated in a late-stage study for treating rare genetic diseases transthyretin amyloidosis (ATTR) cardiomyopathy and polyneuropathy.
Now what
Eidos Therapeutics' shareholders now must approve the proposed acquisition with at least two-thirds of outstanding shares not already owned by BridgeBio voting in support of the deal. In addition, BridgeBio shareholders must approve the issuance of new shares to fund the transaction. The acquisition is expected to close in the first quarter of 2021.
