(Alliance News) - RTW Biotech Opportunities Ltd on Wednesday said it has agreed to acquire all the assets of fellow London listing Arix Bioscience PLC in exchange for new RTW shares, and to buy a 25.5% stake from Arix's largest shareholder in cash.
Shares in RTW Biotech were down 3.9% at USD1.10 in London on Wednesday. Arix shares were down 1.1% at 116.70 pence each.
The New York-based investment firm, focused on the life sciences sector, said the transaction will be effected through a scheme of reconstruction and the voluntary winding up of London-based Arix, assuming regulators and Arix shareholders approve.
"Having considered the full spectrum of options available, [Arix's board]...unanimously recommends shareholders vote in favour of the scheme," explained Arix Chair Peregrine Moncreiffe. "The clear strategic and financial logic of the transaction maximises the value of our assets and provides a meaningful long-term growth opportunity with RTW and their impressive track record as a life sciences investment manager."
Shareholders in Arix, a venture capital firm investing in "breakthrough" biotechnology companies, will receive 1.4633 new RTW shares in exchange for each Arix share. The exchange ratio values Arix's shares at GBP1.43 each, a roughly 46% premium to the closing price of 98 pence on July 12, the day before Arix launched a strategic review.
RTW also expects on Wednesday to enter an agreement to buy 33.0 million Arix shares from Acacia Research Corp, Arix's largest shareholder with a 25.5% approximate stake. RTW expects this cash share purchase, also at GBP1.43, to complete in the first quarter of 2024, and said the acquisition should be "immediately accretive" to its net asset value.
"I am delighted that we have reached an agreement to bring Arix's cash and life science assets into RTW Bio, and we welcome Arix shareholders to the RTW Bio shareholder registry," commented RTW Chair William Simpson. "The combination has compelling strategic rationale which is expected to generate future growth opportunities for all shareholders.
"The transaction represents an exciting opportunity to build upon our strong foundation by adding capital and scale to our best-in-class platform."
Arix has appoint RTW to be its investment manager in the event that Arix shareholders reject the takeover offer but the cash purchase of shares by RTW from Acacia Research completes.
By Emma Curzon, Alliance News reporter
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