SciClone agrees to be acquired by Chinese consortium

Shares of US drugmaker SciClone Pharmaceuticals (Nasdaq: SCLN) were up 8.9% at $11.00 in premarket trading, after the company revealed it had entered into definitive merger agreement to be acquired by consortium of Chinese investors, led by GL Capital

The consortium will acquire all the outstanding shares of SciClone for $11.18 per share in cash, which represents a premium of 11% over SciClone's closing stock price on June 7. The transaction, which was unanimously approved by SciClone's board, values company at around $605 million. The transaction, which is expected to close this calendar year, is subject to approval by SciClone stockholders and other customary closing conditions.

"The board has determined that a sale of the company at this time is the best way to deliver meaningful value to SciClone's stockholders," said Jon Saxe, chairman of SciClone. "While SciClone has executed well on its growth strategies to date, following continued review of its strategic alternatives, the board has determined that the challenges of continuing to operate as an independent US-based, publicly traded company in the complex, competitive and increasingly price-sensitive China pharmaceuticals market represent long-term risks to the company's ability to maintain a strong growth trajectory and to meet its financial objectives. This agreement enables SciClone stockholders to achieve substantial cash value and premium to the Company's recent trading price in the near term and eliminates exposure to long-term risk and uncertainty," he added.