Biogen Inc. (NASDAQ: BIIB), a leading global Biotech stock, is reportedly in talks to be purchased by South Korea’s Samsung Group, according to Reuters.
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Shares of Biogen closed 9.5% higher on Wednesday.
Korea Economic Daily reported on Wednesday that Biogen contacted Samsung Group to sell its shares, which could be valued at $42 billion, representing about an 11% premium to Biogen’s current market capitalization of approximately $37.9 billion.
Biogen refrained from commenting on market rumors, while Samsung denied the speculation.
Details
Earlier this year, Samsung Group committed to invest 240 trillion won ($206 billion) over the next three years to expand its footprint in biopharmaceuticals, artificial intelligence, semiconductors, and robotics in the post-pandemic era.
Notably, if the deal goes through, it will be the biggest overseas acquisition in history by a South Korean company.
Wall Street’s Take
Following the report, Needham analyst Ami Fadia maintained a Buy rating and a price target of $386 (49.43% upside potential) on the stock.
Fadia said, “We believe that this deal makes sense given the overhang on BIIB’s stock over the past several months. On the price, we believe that while the ~20% premium seems reasonable at first glance, we could see greater value in the stock but acknowledge that it is hard to value Biogen given the uncertainties around Aduhelm and BAN2401, and an earn-out deal structure would likely make sense.”
The rest of the Street is cautiously optimistic about the stock, with a Moderate Buy consensus rating based on 15 Buys and 11 Holds. The average Biogen price target of $334.09 implies 29.34% upside potential. Shares have gained 5.5% over the past year.
Risk Analysis
According to the new TipRanks Risk Factors tool, Biogen stock is at risk mainly from three factors: Finance and Corporate, Tech and Innovation, and Production, which contribute 23%, 20%, and 17%, respectively, to the total 30 risks identified for the stock.
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