Key Takeaways
- Silence Therapeutics shares jumped 125% after Merck KGaA agreed to buy the company for $20 per ADS in cash, about $1.3 billion in total.
- Taking a certain $20 instead of paying for divesiran’s Phase 3 alone looks like the right call for shareholders.
- Silence raised $175 million at $13.50 per ADS in August, and its 30-day average price before the deal was $10.99.
- The deal is expected to close in the first quarter of 2027, once shareholders, a UK court and regulators approve it.
Silence Therapeutics (SLN) shares are up 125%(!) today after the company agreed to be acquired by Merck KGaA (MKGAY) for $20 per ADS, all in cash.
What exactly happened
The terms, announced before the open:
- $20.00 per ADS in cash, a 130% premium to Friday’s close
- An 82% premium to the 30-day volume-weighted average price of $10.99
- About $1.3 billion in equity value
- Expected to close in the first quarter of 2027
Iain Ross, Silence’s chairman and interim principal executive officer, said the deal “delivers significant, immediate and certain value to our shareholders.”
(I could quibble slightly on “immediate” since the cash arrives at close. So, give or take five months or so.)
A Phase 3 isn’t cheap
Merck KGaA is buying divesiran, Silence’s drug for polycythemia vera, a rare blood cancer. Ross called its Phase 2 data “potentially best-in-class,” and said Merck KGaA can “accelerate its Phase 3 development.”
That’s the catch for Silence on its own. Its cash and short-term investments fell from $173 million in September 2024 to $72.1 million at the end of June 2026…
So in August, alongside its Phase 2 data, Silence raised $175 million by selling shares at $13.50 each. By last week, the stock’s 30-day average was $10.99. Paying for a Phase 3 alone likely meant raising money again, at a lower price.
Instead, those August buyers get a 48% gain in about two months. Not bad at all.
The last 2%
Shares are trading just under the $20 offer, a gap of about 2%. That gap is what the market charges for waiting until close, and for the chance the deal breaks. It works out to roughly 4% to 5% a year if the deal closes by the end of March.
Silence shareholders still have to vote for it, the High Court of England and Wales has to approve it, and regulators have to sign off. Holders of about 14% of the vote have already agreed to back it.
If the deal breaks, the fall would be steep: Friday’s close was less than half the offer.
My view is that the board made the right call. A sure $20 in cash, well above the price Silence sold shares at in August, is hard to beat for a company with a Phase 3 to pay for. If you don’t already own it, though, I wouldn’t chase that last 2%.
Of course, “certain” still needs a shareholder vote and a judge’s sign-off, and the deal isn’t expected to close until the first quarter of 2027.
So what is Silence Therapeutics stock actually worth if the deal doesn’t close?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what Silence Therapeutics could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Value Silence Therapeutics for free
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
