Tesaro gets $5.1 billion takeover bid

There has been much speculation in recent weeks that US drugmaker and PARP inhibitor specialist Tesaro (Nasdaq: TSRO) had put itself up for sale that has already sent the firm’s shares higher, but today they leapt more than 59% to $73.95 in pre-market trading after it was revealed that it has reached agreement to be taken over.

UK pharma major GlaxoSmithKline (LSE: GSK) today announced that it has entered into a definitive agreement to acquire Tesaro for an aggregate cash consideration of around $5.1 billion (£4.0 billion). The proposed transaction will significantly strengthen GSK’s pharmaceutical business, accelerating the build of GSK’s pipeline and commercial capability in oncology. Tesaro shares were trading for $75 at the beginning of the year, so this deal only brings the stock to break even. GSK’s shares fell 6.08% to £15.22 by early afternoon.

The acquisition price of $75 per share in cash represents a 110% premium to Tesaro’s 30 day Volume Weighted Average Price of $35.67 for a total of about $5.1 billion including the assumption of Tesaro’s net debt.