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TICKERS: AMAG

AMAG Pharma Receives $647 Million Takeover Bid from Luxembourg Firm

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Shares of AMAG Pharmaceuticals traded 44% higher after the company reported it has agreed to be acquired by Covis Group S. r.l. for $13.75 per share in cash, or approximately $498 million on a fully diluted basis.

Commercial-stage biopharmaceutical firm AMAG Pharmaceuticals Inc. (AMAG:NASDAQ) and Covis Group S. r.l. of Luxembourg, today announced that "the two companies have entered into a definitive agreement under which Covis will acquire AMAG for $13.75 per share in cash, or approximately $498 million on a fully diluted basis and approximately $647 million on an enterprise basis." The firms noted that the offering price represents about a 46% premium to AMAG's common stock closing price on September 30, 2020.

Covis' CEO Michael Porter remarked, "AMAG's category leading treatments are strong strategic complements to our existing therapeutic portfolio. Through this combination, we believe we will be able to unlock value for all of our stakeholders, employees and patients through the effective and efficient management of these products, coupled with our two companies' longstanding commitment to expanding patient access to therapy and putting patient interests first...We look forward to engaging with the talented team at AMAG as we work together to plan the integration of our two organizations."

AMAG Pharmaceuticals CEO Scott Myers commented, "In the beginning of 2020, AMAG announced that the company had undertaken a strategic review of our product portfolio and strategy, the guiding principles of which included driving near- and long-term profitability and enhancing shareholder value. This strategic review resulted in the company pursuing and accomplishing the divestiture of its women's health assets, and other efforts to streamline and strengthen the core business to position AMAG for the future. Following this initial transformation, our Board of Directors and management team, together with independent legal and financial advisors, thoroughly evaluated the transaction with Covis as well as other strategic options and concluded that it represents the most compelling opportunity for shareholders, providing them certain and immediate cash value. We believe Covis is the right partner for AMAG, especially in light of Covis' shared commitment to ensuring that our therapies will reach patients in need. We are confident the work we've done will continue to thrive under Covis' leadership."

The companies advised that the tender offer is subject to majority shareholder (shares) approval along with customary closing conditions and regulatory approvals. The firms stated that when the tender offer conditions are met and the offer is completed, a 100%-owned subsidiary of Covis will merge with AMAG and any outstanding AMAG shares not tendered in the tender offer will be converted into the right to receive the same $13.75 per share in cash paid in the tender offer.

The report noted that Covis intends to finance the acquisition with cash on hand and some committed debt and equity financing. The companies indicated that the tender offer is expected to commence in October 2020 and to close in November 2020 assuming the transaction is approved under Hart-Scott-Rodino regulations.

The news release stated that the Boards of Directors of each company have already unanimously approved the transaction and that all of AMAG's board members and executive officers have agreed to tender their shares in favor of the transaction.

Covis is a global specialty pharmaceutical company headquartered in Luxembourg and operates facilities in Zug, Switzerland. The firm is engaged in marketing therapeutics for patients with chronic illnesses and life-threatening medical conditions.

AMAG is a commercial-stage biopharmaceutical company based in Waltham, Mass., that is focused on bringing innovative products to patients with unmet medical needs. The firm's pharmaceutical products cover a wide range of treatment areas with a focus on maternal health, anemia management and cancer supportive care.

AMAG Pharmaceuticals began the day with a market capitalization of around $324.1 million with approximately 34.48 million shares outstanding and a short interest of about 29.50%. AMAG shares opened 37% higher today at $12.98 (+$3.50, +36.92%) over yesterday's $9.48 closing price and reached a new 52-week high price this morning of $13.80. The stock has traded today between $12.55 and $13.80 per share and is currently trading at $13.60 (+$4.20, +44.63%).

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