Eli Lilly and Company (LLY) and Loxo Oncology (LOXO) announced a definitive agreement for Lilly to acquire Loxo Oncology for $235.00 per share in cash, or approximately $8B. Loxo Oncology is a biopharmaceutical company focused on the development and commercialization of highly selective medicines for patients with genomically defined cancers. Under the terms of the agreement, Lilly will commence a tender offer to acquire all outstanding shares of Loxo Oncology for a purchase price of $235.00 per share in cash, or approximately $8B. The transaction is not subject to any financing condition and is expected to close by the end of the first quarter of 2019, subject to customary closing conditions, including receipt of required regulatory approvals and the tender of a majority of the outstanding shares of Loxo Oncology’s common stock. Following the successful closing of the tender offer, Lilly will acquire any shares of Loxo Oncology that are not tendered into the tender offer through a second-step merger at the tender offer price. The tender offer represents a premium of approximately 68% to Loxo Oncology’s closing stock price on January 4, 2019, the last trading day before the announcement of the transaction. Loxo Oncology’s board recommends that Loxo Oncology’s shareholders tender their shares in the tender offer. Additionally, a Loxo Oncology shareholder, beneficially owning approximately 6.6% of Loxo Oncology’s outstanding common stock, has agreed to tender its shares in the tender offer. This transaction will be reflected in Lilly’s financial results and financial guidance according to Generally Accepted Accounting Principles. Lilly will provide an update to its 2019 financial guidance, including the expected impact from the acquisition of Loxo Oncology, as part of its fourth-quarter and full-year 2018 financial results announcement on February 13, 2019.
