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Sarah Godfrey
31 October 2017 · 2 min read

HBM Healthcare Investments top holding AAA receives takeover bid from Novartis

Tender offer for 100% of radiotherapeutic oncology specialist Advanced Accelerator Applications at 25% premium to 30 September valuation

Switzerland-based global healthcare giant Novartis has announced a takeover bid for Advanced Accelerator Applications (AAA), the largest holding of specialist investment fund HBM Healthcare Investments (HBMN). The deal values AAA, whose Lutathera treatment for neuroendocrine tumours was granted EU approval in September 2017, at US$3.9bn.

HBMN, which holds both listed and unlisted investments in its global portfolio of healthcare companies and funds, first invested in AAA in February 2014 when it was still a private company. The fund is AAA’s second-largest shareholder, with 2.4m American Depositary Shares (ADS) (down from a peak of 3.5m) representing 7.0% of the company. At HBMN’s 30 September 2017 half-year end, the shares were valued at CHF157.1m; the US$41 per ordinary share/$82 per ADS tender price (at current exchange rates) increases the value of the stake to CHF196.5m, a 25% uplift.

AAA has signed a memorandum of understanding with Novartis, which will proceed with the cash tender offer subject to AAA’s directors recommending the deal to shareholders, and a satisfactory works council consultation.

If the tender is successful, the proceeds of the takeover will increase HBMN’s NAV per share by 2.5% (based on the last reported 15 October NAV). The tender price is more than 600% higher than the average US$11.66 HBMN paid to acquire the shares.

Read our latest research on HBMN here.

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