Stocks weren't able to mount a convincing recovery on Monday morning after facing steep volatility toward the end of last week. As of 10 a.m. ET today, the Dow Jones Industrial Average (^DJI 0.40%) was down 295 points to 34,443. The S&P 500 (^GSPC 1.02%) had lost 20 points to 4,398, while the Nasdaq Composite (^IXIC 2.02%) held up better, trading unchanged at 13,791.
There are a lot of uncertainties in the financial markets right now, with inflationary pressures, pandemic-driven disruptions, and geopolitical conflict weighing on investor sentiment. Yet in the corporate world, companies looking for strategic acquisitions are finding that there are good deals to be made. This morning, a couple of stocks got big boosts on news of takeover interest. Below, you'll learn more about why Cornerstone Building Brands (CNR) and BioDelivery Sciences International (BDSI) got onto investors' radar Monday morning.
Cornerstone goes private
Shares of Cornerstone Building Brands jumped more than 22% on Monday morning. The maker of exterior building products received a buyout bid from its largest shareholder to go private in a deal valuing the company at more than $3 billion.
Cornerstone announced that it had received a nonbinding proposal from private equity investing specialist Clayton, Dubilier & Rice (CD&R). Under the terms of the proposed deal, CD&R would pay Cornerstone shareholders $24.65 per share in cash in order to take complete control of the building products company.
Image source: Getty Images.
CD&R already owns 49% of Cornerstone's outstanding shares, and given the relationship between the two entities, the company had already created a special committee of independent directors to evaluate any proposal that CD&R might have made regarding the business.
Cornerstone has seen tough times in recent years, with its stock price coming under pressure as concerns about the sustainability of the construction boom weighed on sentiment. However, as the U.S. economy moves back toward a healthier expansion, CD&R apparently believes the time is right to take Cornerstone private and benefit from better times.
BioDelivery Sciences sells out
Shares of BioDelivery Sciences enjoyed an even bigger gain, soaring 52%. The biopharmaceutical company got an offer from an industry peer at a hefty premium to where it traded last week.
The company said that it has entered into a merger agreement with Collegium Pharmaceutical (COLL 1.62%). The deal values BioDelivery at just over $600 million and will involve paying BioDelivery shareholders $5.60 per share in cash. That's 54% above its closing price on Friday, and 65% higher than its average price over the past month.
The deal is just the latest good news for BioDelivery. In January, the company announced that it expects to launch a new treatment for migraine sufferers in the first quarter of 2022. It also issued encouraging financial guidance for the year, prompting investors to bid up the share price accordingly.
Companies in the biopharmaceutical space are all clamoring for growth, and grabbing up BioDelivery's approved treatments and pipeline of candidate drugs makes a lot of sense in fostering Collegium's growth. Investors on both sides like the move, with Collegium shares rising 14%. At least for today, though, BioDelivery shareholders are getting the better end of the deal.