TD Cowen downgraded Verona Pharma (NASDAQ:VRNA) stock rating from Buy to Hold while raising its price target to $107.00 from $100.00 following news of an acquisition by Merck (NSE:PROR).
The pharmaceutical company will be acquired by Merck at $107 per American Depositary Share (ADS), representing a 39% premium over the 60-day average and a 23% premium over the previous day’s closing price.
TD Cowen indicated the acquisition price appropriately values Verona Pharma’s "multibillion-dollar potential" in the pharmaceutical market.
The research firm does not anticipate regulatory concerns or competing acquisition offers to emerge during the transaction process.
The acquisition is expected to close in the fourth quarter, with TD Cowen noting no other major catalysts for Verona Pharma are anticipated in the interim period.
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