Wainwright Says Relypsa Takeout Price Is Fair

Galenica AG has announced a definitive agreement to acquire Relypsa Inc RLYP for $32 per share in cash. H.C. Wainwright’s Ed Arce commented that this puts an end to “at least nine months of near constant take out speculation.” He downgraded the rating on the company from Buy to Neutral, while maintaining the price target at $32.

The price being offered by Galenica represents a 59.2 percent over Relypsa’s Wednesday close of $20.10, analyst Ed Arce noted.

Galenica Was At An Advantage

A joint venture including Galenica has acquired commercial rights to Relypsa’s Veltassa outside the US and Japan in August 2015. Since then, the JV has “held a significant advantage over other potential RLYP bidders in evaluating the commercial potential of Veltassa,” Arce mentioned.

Related Link: Galencia's Bid For Relypsa Is "Reasonable," Another Bidder "Unlikely"

Not only was the JV well-acquainted with its acquisition target, but it has “a clear strategic rationale and motivation, in our view, for consummating the deal,” the analyst stated.

Merger Likely To Be Closed

The deal is scheduled to close in 3Q16. Arce expects the merger to be closed as planned, and believes that another bidder will likely not emerge. He added that the acquisition price seemed fair.

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