Sirtex Medical Ltd [ASX: SRX] surged roughly 46% today following a trading halt Tuesday morning. Shares are currently trading at $27.50, up from $18.83 on 29 January.
Why the share price rise?
The surge in share price is due to an announcement made by the company revealing a takeover offer by medical giant Varian.
The US-listed company, a leading cancer care solution developer, has offered $28 per share in cash — a 49% increase to the closing price of $18.83 prior to the trading halt.
The Australian Financial Review (AFR) refer to it as ‘the biggest takeover so far in 2018’.
Sirtex Medical, best known for its leading technology to treat inoperable liver cancer, has received multiple offers over the past year. Interim Chairman Dr John Eady, told Business Insider that he is confident the company could have a ‘successful stand-alone future’, but the support of Varian would have an ‘attractive outcome’ for all involved.
Sirtex Medical Chief Executive Andrew McLean, told AFR:
‘It’s a reflection of confidence in the business and the people of Sirtex. Varian is a top quality organisation and their intention is to grow this business…
‘We are very confident and optimistic about the future growth prospects of the organisation. They’ve got themselves a great business with further growth ahead’.
What now for Sirtex Medical?
Sirtex is set to release its first half results on 21 February. Earlier this month preliminary numbers were released showing a 16% increase, totalling $34 million. The company is expecting higher sales in the second half.
If all goes to plan, a vote for Varian’s offer will take place for shareholders mid-May and then implementation will follow late May. Although, if things don’t work out, share prices could plummet even lower than before.
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