LOXO, LLY: Loxo Oncology Stock Soars on $8 Billion Eli Lilly Deal

Eli Lilly is paying $235 per share for LOXO

Loxo Oncology (NASDAQ:LOXO) stock was soaring on Monday following news of a deal with Eli Lilly (NYSE:LLY).

LOXO, LLY: Loxo Oncology Stock Soars on $8 Billion Eli Lilly Deal

The deal between the two companies will have Eli Lilly acquiring Loxo Oncology for $8 billion. This will have it paying $235 for each share of Loxo stock. LLY will be using cash to fund its acquisition of the company.

The offer of $235 per share for LOXO stock is a pretty premium for investors. It represents a 68% premium over the stock’s closing price on Friday, which was the last day of trading prior to the announcement of the deal.

Eli Lilly says that it is expecting its deal to acquire the company will have an effect on its 2019 earnings. The company says it will provide an update to its 2019 guidance in its earnings report for the fourth quarter of 2018. It will release this earnings report on Feb. 13, 2019.

According to Eli Lilly, it shouldn’t have any trouble completing the deal with Loxo Oncology. The company already has a commitment from a shareholder with a 66% stake in the company to sell their shares in the tender offer. The LOXO Board of Directors is advising investors tender their shares during the offer.

The deal between the two companies is expected to close during the first quarter of 2019. It will still need to complete other customary closing conditions, such as getting approval from regulators, before it can reach completion.

LOXO stock was up 66% and LLY stock was up slightly as of Monday afternoon.

As of this writing, William White did not hold a position in any of the aforementioned securities.

Article printed from InvestorPlace Media, https://investorplace.com/2019/01/loxo-oncology-stock-soars-on-eli-lilly-deal/.

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