Imago BioSciences (IMGO) soared over 100 per cent today; Know why?

2 min read | November 21, 2022 07:36 AM PST | By Rupam Roy

Imago BioSciences (IMGO) soared over 100 per cent today; Know why? — Image source: © Komkrittor | Megapixl.com

Why did it rise?

Imago BioSciences is a clinical-stage biopharmaceutical firm based in Redwood City. The company engages in discovering and developing drugs to treat myeloproliferative neoplasms (MPNs) and other bone marrow disorders.

Meanwhile, a leading healthcare company, Merck & Company, Inc. (NYSE: MRK) said on November 21, that it would acquire the biotech firm. According to the announcement, Merck & Company would acquire Imago BioSciences in a cash deal of US$ 36 per share, through one subsidiary. At that price, the total equity value would be about US$ 1.35 billion, the company said.

As per the terms of the acquisition agreement, the US$ 264.94 billion market-cap healthcare firm will commence a tender offer through its subsidiary to purchase all the outstanding shares of the Redwood City-based biotech firm.

The closing of the tender deal would depend on certain satisfactory customary closing conditions.

After the successful conclusion of the deal, the acquisition subsidiary of Merck & Company would be merged into Imago BioSciences, and any remaining shares of Imago BioSciences' common stock will be canceled and converted into the right to receive the same tender offer price of US$ 36 per share.

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Bottom line:

Following the acquisition news, the price of IMGO stock shot up 105.06 per cent at 9:32 am ET on November 21, to trade at US$ 35.68, while its trading volume was more than 2.57 million.

Meanwhile, the IMGO stock closed at US$ 17.4 last Friday, November 18. In Q3 FY22, Imago BioSciences's net loss deteriorated to US$ 16.77 million, against a loss of US$ 11.67 million in Q3 FY21.

Notably, both companies expect the transaction to close in the starting quarter of next year.

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