Menu
Merger Arbitrage activity increased last week with five new deals announced and three deals closing.
Three health care sector deals were announced on the first day of JP Morgan’s 41st annual Healthcare Conference that took place between January 9, 2023 – January 12, 2023. All three deals involve contingency payments, a strategy for risk-mitigations and a way to sweeten the deal to get it over the finish line. We have had mixed results with contingent value rights (CVRs) and like to participate in them when they are like a free lottery ticket as discussed in our November 2022 mid-month update.
The three target companies – Cincor, Amryt and Albireo received significant premiums at a time when their stocks were in decline. Considering cross-border deal issues, it is important to keep in mind that all three acquirers are European companies.
The Acquisition of CinCor Pharma (CINC) by AstraZeneca (AZN)
On January 9, 2023, CinCor, a clinical-stage biopharmaceutical company entered into an agreement to be acquired by UK based AstraZeneca for a transaction valued at approximately $1.3 billion, representing a 121% premium to its closing price on January 6, 2023.