Reason #1: The Premium Is Incredibly Strong
First and foremost, the premium offered by UCB in this deal is an incredibly strong one. In most merger and acquisition cases, we see premiums ranging from 15% to 30%. In this particular case, the premium offered to Ra Pharmaceuticals was well over 100%.
What does this mean?
Well, it means that investors are going to receive an immediate and substantial return of value. With the premium being over 100%, it means that investors can expect gains to be in the same range.
Considering the fact that a strong investment portfolio will generate about 10% gains per year, a 100% gain on one transaction is incredible news. So, there’s no doubt that the premium offered in the deal to acquire RARX is exciting to investors.
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