- Diurnal agrees takeover at 144% premium
- Major shareholders support the deal
- Deal expected to complete in Q4
Hormone-deficiency drug specialist Diurnal (DNK:AIM) has agreed an all-cash takeover from US-based neuroscience biopharmaceutical company Neurocrine, valuing the company at £48.3 million or 27.5p per share.
This represents a 144% premium to the prior closing price and a 151% premium to the volume-weighted average closing price over the last three months. The shares surged 136% higher to 26.5p, slightly shy of the offer price.
Diurnal’s shares have dropped 81% over the last year and were trading below pre-pandemic levels prior to today’s announcement.
DONE DEAL
The board has unanimously recommended the offer and said it considers the terms to be ‘fair and reasonable’. The directors of Diurnal own just over three million shares representing around 2% of the company’s capital.
Neurocrine has also secured approval from Diurnal’s largest shareholders including IP Group (IPO) and Polar Capital (POLR), and in aggregate has acceptances in respect of 93.2 million shares representing 54.8% of the company’s ordinary share capital.
To get the deal over the line, the US company needs at least 75% shareholder approval which looks likely given the backing of leading institutional stakeholders.
A BIRD IN THE HAND
Although Diurnal was making good progress in commercialising its product portfolio, the development was not risk free and the company would have needed further equity raises to achieve profitability.
With interest rates on the rise and financial conditions tightening, the funding risks were not inconsequential.
Diurnal’s non-executive chairman Anders Härfstrand commented: ‘We believe the acquisition is compelling for Diurnal's shareholders given the risks associated with achieving Diurnal's vision of creating a profitable business, in particular the ongoing commercial roll out of Diurnal's products in Europe and the execution of key clinical studies, in addition to the substantial shareholder dilution that is likely to result from accessing the capital required to deliver this vision.’
Nasdaq-listed Neurocrine has a market capitalisation of £8.4 billion and generated net product sales of $1.09 billion and net income $89.6 million (around £75.3 million) in 2021.
