Tesaro stock was flying high on Monday with news that GlaxoSmithKline (NYSE:GSK) is planning to acquire it.
GlaxoSmithKline notes that the total value of the deal to acquire Tesaro (NASDAQ:TSRO) is $5.10 billion. This will have it paying $75 for each share of Teesaro stock. This represents a 110% premium to the stock’s 30 day Volume Weighted Average Price of $35.67.
A subsidiary of GlaxoSmithKline will be making an offer for all issued and outstanding shares of Tesaro stock. This will occur within the next 10 business day. Once the tender offer is complete, GSK will buy out any remaining shares of Tesaro stock not in the tender offer via a second-step merger at the tender offer price.
GlaxoSmithKline doesn’t go into details about the exact changes that will take place with Tesaro’s executives after the merger. However, it does note that it is in discussions to make sure that several key executives continue to work for the company following the merger.
“The acquisition of TESARO will strengthen our pharmaceuticals business by accelerating the build of our oncology pipeline and commercial footprint, along with providing access to new scientific capabilities,” Emma Walmsley, CEO of GlaxoSmithKline, said in a statement. “This combination will support our aim to deliver long-term sustainable growth and is consistent with our capital allocation priorities.”
GlaxoSmithKline points out that the deal already has the unanimous approval from TSRO’s Board of Directors. However, it will still need approval from regulators and holders of Tesaro stock before it can reach completion. The companies are expecting the deal to close during the first quarter of 2019.
TSRO stock was up 58% and GSK stock was down 7% as of noon Monday.
As of this writing, William White did not hold a position in any of the aforementioned securities.
