Celeryroot,
Sorry, I cannot reliably tell you when the deal closes. I vaguely recall reading that it will be in Q3, but I cannot remember the context in which I came across that information.
I am intrigued by what I perceive as blatant pricing inefficiency of SRGN, given the terms of the LGND buyout. Perhaps I am missing something obvious, but I really do not think that is the case:
The facts, as I understand them, are:
(1) Each SRGN share will definitely convert into 0.036 LGND at some point in the future, thus making SRGN an ironclad proxy for LGND.
(2) LGND closed at 14 7/16 (ask) and SRGN closed at 0.52 (ask.) It just so happens that 0.036 times 14 7/16 is equal to 0.52.
So far so good, except that:
(3) Each share of SRGN also entitles its holder to $0.23, in cash and/or LGND stock, payable six months after the fact, should Ontak get approved within two years. That represents a potential 44% additional return on the $0.52 investment, over and above any gain related to LGND's appreciation in the meanwhile.
So, why is the market valuing that part of the deal which is contingent on Ontak's approval at zero? I have to believe that LGND did their homework, and thus, that Ontak is at least a reasonably good bet for FDA approval.
Given all the above, what would be the rationale for choosing to hold LGND over an equal dollar-investment in SRGN (particularly in an IRA account, where neither margin nor incurring taxes through realizing gains is an issue?)
Am I really missing something, or are they giving away free money??
Take care,
RB
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