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Date : 16/12/2021

CSL Stock Price Sinks Following Announcement On Vifor Deal

Why Is CSL Share Price Trading Lower After Vifor Deal?

CSL shares are back from their trading halt, however, not with a positive come back. Thus, the shares sinks by more than 8% after the firm proceeded to raise US$4.5 billion. What happened?

The CSL share price has returned from its trading halt on Thursday morning. At the time of writing, the biotherapeutics company’s shares are down 8.16% to $273. CSL ASX share price was placed into a trading halt on Tuesday whilst it launched an equity raising.

CSL has completed the institutional component of the capital raising. Thus, the biopharmaceutical firm raised an equivalent of $6.3 billion at $273 per new share. This represents an 8.2% discount to its last close price.

We have seen CSL shares receive strong support for its placement from existing shareholders and new investors.

Therefore, CSL Limited will now push ahead with its non-underwritten US$534 million share purchase plan. These funds will be raised at the lower of the placement price and at a 2% discount to the five-day VWAP of CSL shares.

Nonetheless, this was the largest ever primary equity raise in Australia. CSL is now preparing for its share purchase plan for eligible shareholders. This will be launched on Tuesday, December 21, 2021.

CSL is acquiring the Swiss Biotech giant: Vifor

CSL Limited plans to use the proceeds from the equity raising, along with new debt and existing cash reserves to fund the acquisition of Vifor Pharma. Vifor is the Swiss biotech giant which could potentially be taken over for $17.2 billion in cash.

This deal is a very important transaction for CSL Limited. Thus, this acquisition expands the company’s leadership across an attractive portfolio focused on renal disease and iron deficiency. The deal also highlights that Vifor has a high-quality pipeline and complements CSL’s existing therapeutic focus areas. Vifor will bring to CSL expertise in Haematology, Thrombosis, Cardiovascular, and Transplant.

This takeover will bring to CSL Limited an outstanding team and a leading portfolio of products across renal disease and Iron Deficiency. Moreover, Vifor will complement CSL business development effort and licensing strategy. Vifor Pharma will also expand its presence in the rapidly growing nephrology market. This whilst allowing CSL Limited to leverage its complementary scientific expertise.

asx: csl share price trend on tradingview

Since the last six-month period, CSL shares performed in line with its major competitors, Vertex Pharmaceuticals (VRTX) and Gilead Sciences (GILD) which returned 11.72%, and 4.60%, respectively. The recent pullback following the Vifor deal announcement pushed the CSL share price down to a -10.23% performance for the last six-month period. Despite the correction following Tuesday equity raising, ASX: CSL stock still outperforms by far Biogen (BIIB), which is in decline since the last six months down by -40.46%.

 

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