Ironwood punts $1 billion on rare GI disease company

Shares of Swiss clinical-stage biotech VectivBio (Nasdaq: VECT) shot up almost 38% to $16.11, on the news of a takeover bid.

USA-based Ironwood Pharmaceuticals (Nasdaq: IRWD) this morning revealed it has entered into a definitive agreement to acquire VectivBio for $17.00 per share in an all-cash transaction with an estimated aggregate consideration of around $1 billion, net of VectivBio cash and debt. The US firm’s stock was down 4.5% at $10.00 following the news release.

The acquisition price represents a premium of 80% relative to the volume-weighted average share price over the previous 90 trading days. The transaction was approved by both the Ironwood and VectivBio boards of directors. Ironwood will finance it with cash on hand and a four-year $500 million revolving credit facility set up in conjunction with the deal.