What happened
Shares of Point Biopharma Global (PNT) are up 86% this week as of Thursday's close, according to data provided by S&P Global Market Intelligence, after the radiopharmaceutical company agreed to be acquired by Eli Lilly (LLY 1.19%).
So what
More specifically in a press release on Tuesday, Point Biopharma announced that Eli Lilly will commence a tender offer to acquire all outstanding shares of Point for $12.50 per share in cash -- a roughly 87% premium from its closing price Monday and valuing the company at $1.4 billion.
"The combination of Point's team, infrastructure and capabilities with Lilly's global resources and experience could significantly accelerate the discovery, development and global access to radiopharmaceuticals," stated Point CEO Joe McCann.
Now what
The deal has already been approved by both companies' boards of directors and isn't subject to any financing condition. But it does still require the success of Lilly's tender of a majority of Point's common shares outstanding -- after which Lilly will acquire any shares of Point that were not tendered in the tender offer through a second-step merger. The deal is also subject to a license transfer approval from the U.S. Nuclear Regulatory Commission.
Assuming all goes as planned, however, the transaction is expected to close near the end of 2023. So with shares currently trading only slightly below the agreed acquisition price -- and unless waiting longer to sell wouldn't push you over the one-year threshold required to qualify for lower long-term capital gains tax rates on your profits -- I wouldn't blame Point Biopharma shareholders for selling now and putting that money to work elsewhere.
