H. Lundbeck To Acquire Chelsea Therapeutics In $658 Mln Deal

(RTTNews) - H. Lundbeck A/S (HLUKY.PK, HLUKF.PK) and Chelsea Therapeutics International, Ltd. (CHTP) have entered into a definitive agreement under which Lundbeck would acquire Chelsea.

Under the terms of the agreement, Lundbeck will commence a tender offer for all outstanding shares of Chelsea, whereby Chelsea stockholders will be offered an upfront payment and contingent value rights or CVRs, representing a total potential consideration of up to $7.94 per share, or $658 million.

The total potential consideration represents a premium of 59 percent over the closing price of Chelsea shares on May 7.

The consideration includes $6.44 per share in cash, or approximately $530 million, as well as CVRs that may pay up to a total of an additional $1.50 upon achievement of certain commercial milestones related to NORTHERA's commercial performance in the period 2015-2017.

The proposed upfront per-share price represents a premium of around 29 percent over Chelsea's closing price of $$5.00 on May 7.

The transaction is expected to be cash accretive to Lundbeck in 2015 and earnings accretive in 2016.

If closed, this acquisition will impact Lundbeck's financial guidance for 2014. The company made a potential revision of its forecast for 2014.

While revenue is expected to be intact at 13.5 billion Danish kroner, Earnings Before Interest and Tax, or EBIT, is now estimated to be 0-0.5 billion kroner, compared to the prior forecast of 0.5-1.0 billion kroner.

Core EBIT is now seen in the range of 0.9-1.4 billion kroner, while the previous projection was for 1.2-1.7 billion kroner.