MGI Pharma buys Guilford in $178M deal

US firm MGI Pharma and Guilford Pharmaceuticals have signed a definitive merger agreement providing for the acquisition of the latter in a cash and stock deal valued at $178.0 million.

MGI intends to build a leading biopharmaceutical company focused in oncology and acute care through a business development strategy that broadens both its portfolio of commercial products and pipeline of product candidates. This transaction further strengthens MGI's commercial infrastructure and product development franchises in oncology and acute care, adds to an already robust pipeline of product candidates, and will help drive long-term financial growth of the company.

MGI will acquire all of the outstanding shares of Guilford for $3.75 per share in a taxable merger. This consideration, which represents a premium of 55.6% over Guilford's closing price on July 20, consists of a fractional share of MGI stock valued at $2.625 and $1.125 in cash. The stock portion of this consideration is subject to a 15% collar. Based upon the closing price of its stock on July 20, MGI expects to issue around 4.5 million shares as part of this transaction.