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Why Biogen Stock Was a Winner on Wednesday

By Eric Volkman – Dec 29, 2021 at 6:41PM

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The rumor mill is grinding hard with the company, which, according to a newspaper report, is in talks to be acquired.

What happened

Is Biogen (BIIB -0.53%) about to be acquired?

One news article published on Wednesday reported that this is a possibility. As a result, the company's shares shot up almost 10% higher on the day. It didn't hurt that the rumored buyer is a massive and well-capitalized company that's active in nearly every international market.

Piggy bank with stethoscope.

Image source: Getty Images.

So what

According to that report, published in The Korea Economic Daily and citing an unspecified number of "investment banking sources," Samsung Group is in discussions to purchase Biogen.

Those sources told the business newspaper that Samsung was not the courting party. Apparently, Biogen made the approach to the Korean conglomerate. The potential price is over 50 trillion Korean won ($42 billion), which includes a control premium.

That price is notably above the nearly $38 billion market cap of Biogen, even after the rumor-fueled pop in stock price on Wednesay.

"Samsung is at the negotiating table with the sell side to acquire Biogen," confirmed an unnamed person described as "a senior official at a global investment bank" to the Daily. Neither this person nor the article's other sources provided more details.

Biogen, a veteran U.S. pharmaceutical company, would dramatically increase Samsung's presence in that industry. At the moment, the company has 33 treatments in its pipeline.

Samsung hasn't officially responded to  the article. Financial-news website said Biogen told it that it doesn't comment on "market rumors or speculation related to rumors Samsung Group is in talks to buy it."

Now what

Investors are clearly taking the Daily's report at face value and trading on what's sure to be at least a modest premium on the current share price. But it's worth reiterating that at the moment, such a deal is still just rumor and scuttlebutt -- so potential Biogen stock buyer, please beware.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends Biogen. The Motley Fool has a disclosure policy.

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