Investing.com - Shares of Kite Pharma (NASDAQ:KITE)jumped on Monday after Gilead Sciences Inc (NASDAQ:GILD) made an offer to purchase the company for $11.9 billion, or $180 per share, in cash.
Gilead, a biopharmaceutical company, said the purchase of Kite, also a biopharmaceutical company, would create a company that is a global leader in cell technology. Gilead added that the purchase would diversify Gilead’s portfolio and create long-term shareholder value.
Gilead said the transaction is expected to be neutral to earnings by year three and accretive thereafter. If approved, the acquisition should close in the fourth quarter of 2017.
The offer price represents a 29% premium to Kite’s closing value last Friday. Kite investors reacted appropriately, bidding shares up close to the offering price. Monday afternoon, Kite stock was up 28.2% at $178.28. Gilead’s shares had a more muted response and moved up 1.3%.