By Nigam Arora
Editor’s note: This post was published yesterday in The Arora Report paid feeds.
217th Buyout
Novo Nordisk (NVO) and Pfizer (PFE) have been in a bidding war over biotech Metsera (MTSR). Pfizer prevailed, making Metsera the 217th Arora portfolio company to be bought out.
Late Friday evening, MTSR stock traded as high as $89 on expectations that Novo Nordisk would raise its bid. When Novo Nordisk did not raise its bid, MTSR stock fell.
The Deal
The value of Pfizer’s offer is $86.25 per share. The offer is for $65.60 cash and up $20.65 contingent value rights (CVR) per share. The CVRs are tied to clinical trial milestones and FDA approvals. The additional issue for investors is CVRs do not trade. Thus, the money is locked up.
The deal is expected to close after Metsera’s shareholder vote on November 13.
What To Do Now
What to do now is a matter of personal preference.
Those who do not want the funds to be locked up may consider selling in the open market and exiting the position.
Those who do not mind, may consider continuing to hold.
Profiting From Buyouts
To date, 217 Arora Portfolio companies have been bought out, producing large gains for members who routinely invest in buyout targets. This performance is better than the firms that charge $50,000 per year and provide buyout advice. With The Arora Report, you get so much more.
Signal Limited is a Signal(s) with a great record in similar situations but does not meet all of the stringent criteria for a Signal. Typically Signal Limited has higher risk-reward compared to a Signal over the short term.
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This post was published yesterady on ZYX Buy Change Alert.
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Nigam Arora
Nigam Arora is known for his accurate stock market calls. Nigam is a distinguished master of the macro. He is a popular columnist with over 100 million page views, an engineer, and nuclear physicist by background. Nigam has founded two Inc. 500 fastest growing companies and has been involved in over 50 entrepreneurial ventures. He is the developer of Theory ZYX of Successful Change Management and is the author of the book on Theory ZYX, as well as the developer of the ZYX Change Method for Investing.
