UK drugmakers Sinclair and IS Pharma confirm merger

As previously announced, Sinclair Pharma (LSE: SPH) and fellow UK-based drugmaker IS Pharma (LSE: ISPH) last week reached agreement on the terms of a recommended merger of the two companies (The Pharma Letter February 14), and will create a combined business - to be called Sinclair IS Pharma - worth some £130 million ($208 million).

Under the terms of the accord, IS Pharma shareholders will receive 2.6868 new Sinclair Pharma shares for each IS Pharma share owned. Based on the latest closing price, IS Pharma shares are valued at 99.1p, a premium of 16.6%. Shareholders of Sinclair will hold 63.3% and those of IS shareholders 36.7% of the enlarged share capital.

Following completion of the merger, shares in renamed Sinclair IS Pharma will move to trade on the AIM and will cease to trade on the London Stock Exchange main market. The merger, subject to shareholder approval, is expected to take effect on May 20 and admittance to AIM in early July.