(Sharecast News) - Jounce Therapeutics said on Monday that it was ditching a planned merger with AIM-listed Redx Pharma, opting instead to be bought by Concentra Bioscences.
The boards of Redx and Jounce announced last month that they had agreed to merge. However, Jounce got an unsolicited takeover offer from Concentra on 14 March at $1.80 per share.
Jounce said on Monday that it had agreed to be taken over by Concentra for $1.85 per share in cash plus a non-tradeable contingent value right.
The upfront consideration represents a premium of around 75% to Jounce's closing share price immediately prior to 14 March.
Jounce said: "Following a thorough review process conducted with the assistance of its legal and financial advisors, Jounce's board of directors has determined that the acquisition by Concentra - of which Tang Capital Partners, LP is the controlling shareholder - is in the best interests of all Jounce shareholders, and has unanimously approved the merger agreement.
"Jounce's board of directors is no longer recommending the proposed all-share merger transaction with Redx Pharma."
As part of the takeover, Jounce will cut its workforce by around 84%. This reduction is expected to be completed within the next month and Jounce will incur restructuring costs of around $6.5m.
Jounce Therapeutics is a clinical-stage immunotherapy company focused on developing cancer therapies that enable the immune system to attack tumours and provide long-lasting benefits to patients through a biomarker-driven approach.
Redx tumbled on the news and at 1430 GMT, its shares were down 9.2% at 32.25p.
Dr Jane Griffiths, chair of the board of Redx, said: "The board remains fully confident in the future of Redx despite being disappointed that the board of Jounce has now decided to recommend a cash offer for their company at this late stage.
"We strongly believe in the potential of our clinical stage assets and pipeline of development candidates. Whilst the offer for Redx has not formally lapsed under the UK Takeover Code, the board will consider all options available to it in line with our strategy."
