Synergy Pharmaceuticals (SGYP) Stock: Tumbling On Acquisition News

Synergy Pharmaceuticals Inc (NASDAQ: SGYP) is having an incredibly rough start to the trading session this morning, and for good reason. The company announced that it would be acquired by Bausch Health in a stalking horse takeover.

The news upset investors, sending the stock tumbling down. Today, we’ll talk about:

  • The takeover news;
  • what we’re seeing from SGYP stock as a result; and
  • what we’ll be watching for ahead.

SGYP Announces Takeover News

As mentioned above, Synergy Pharmaceuticals is having a rough start to the trading session this morning after it was announced that the company would be taken over. Bausch Health has been selected as the successful bidder to acquire certain assets of the company.

According to the release, Bausch Health will pay approximately $195 million in cash and assume certain liabilities to acquire the company. So, what’s the deal? Why is it falling?

Well, investors had hoped that the company would be met with other offers under the stalking horse process. Unfortunately for SGYP and its investors, none seemed to be better  than the current offer on the table.

Unfortunately, this didn’t offer much to the company or its shareholders. But, Bausch Health definitely got a good deal here. In a statement, Joseph C. Papa, Chairman and CEO at Bausch Health, had the following to offer:

As we continue to transform Bausch Health, we are now pivoting to offense with research investments and strategic acquisitions that augment our core businesses. We are excited to acquire the assets of Synergy, which we believe will strategically enhance our Salix Pharmaceuticals business and supplement our organic growth in gastroenterology. With our team’s expertise in GI and primary care, we will strengthen our already formidable portfolio of innovative irritable bowel syndrome solutions with the addition of TRULANCE┬«. Additionally, dolcanatide, an investigational incremental peptide that has established proof of concept studies in a host of GI conditions, will be a welcome addition to our early stage pipeline.

What We’re Seeing From The stock 

One of the first lessons that we learn when we start to work in the market is that the news leads to moves. In the case of Synergy Pharmaceuticals, the news was rough to take.

At the end of the day, the company has given up quite a bit of value and investors were hoping to recoup some as a result of this transaction. However, the price leaves little value on the table for investors.

So it’s not surprising to see that upset investors are pushing the stock down in the market this morning. As is normally the case, our partners at Trade Ideas were the first to alert us to the declines. Currently (9:03), BHC is trading at $0.085 per share after a gain loss of $0.12 per share or 57.69% thus far today.

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What We’ll Be Watching For Ahead

Moving forward, the CNA Finance team will continue to keep a close eye on SGYP. In particular, we’re interested in following the story surrounding the acquisition as the transaction will come to a close shortly. Nonetheless, we’ll keep a close eye on the news and bring it to you as it breaks!

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