Is SciClone Pharma Getting Enough in the Buyout?

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SciClone Pharmaceuticals Inc. (NASDAQ: SCLN) saw its shares make a solid gain early on Thursday after it was announced that the company had entered into a definitive agreement to be acquired by a consortium of companies. According to the deal, the consortium will pay $11.18 in an all-cash transaction.

GL Capital Management, Bank of China Group Investment, CDH Investments, Ascendent Capital Partners and Boying make up the buying consortium that plans to purchase the stock.

The transaction will be funded by the buyer consortium through a combination of equity financing and debt financing, and it is not subject to a financing condition. The transaction, which was unanimously approved by SciClone’s board, values the company at roughly $605 million and represents a premium of 11% over SciClone’s most recent closing price, as well as a premium of 16% over its 10-day volume-weighted average closing stock price.

Lastly, this transaction is expected to close this calendar year. However, it is still subject to approval by SciClone stockholders and other customary closing conditions.

Jon S. Saxe, SciClone’s board chair, commented:

The Board has determined that a sale of the Company at this time is the best way to deliver meaningful value to SciClone’s stockholders. While SciClone has executed well on its growth strategies to date, following continued review of its strategic alternatives, the Board has determined that the challenges of continuing to operate as an independent US-based, publicly traded company in the complex, competitive and increasingly price-sensitive China pharmaceuticals market represent long-term risks to the Company’s ability to maintain a strong growth trajectory and to meet its financial objectives. This agreement enables SciClone stockholders to achieve substantial cash value and premium to the Company’s recent trading price in the near term and eliminates exposure to long-term risk and uncertainty.

Shares of SciClone closed Wednesday at $10.10, with a consensus analyst price target of $14.00 and a 52-week range of $8.55 to $15.03. The stock was up nearly 9% at $11.00 in early trading indications Thursday.