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Oppenheimer analysts reiterated an Outperform rating and a $229 per share price target on Seagen Inc (NASDAQ:SGEN) as the Pfizer (NYSE:PFE) deal spread offers an attractive merger arbitrage opportunity.
Earlier this month, Pfizer agreed to acquire Seagen for $229 per Seagen share in cash. With SGEN stock trading around $200 a piece, the analysts say the deal spread is becoming increasingly attractive.
“We remain optimistic on the deal closure. SGEN’s shares continue to trade around $200, providing ~14% upside to PFE’s proposed acquisition price of $229 per share,” the analysts wrote in a note.
Their comments come after Merck KGaA (OTC:MKKGY) said it again has exclusive global rights to Bavencio after the termination of the partnership agreement with Pfizer. For Oppenheimer, this is a sign that Pfizer is working to avoid potential antitrust concerns arising from the Seagen deal.
“Besides Bavencio, we see no obvious assets as potentially concerning from regulatory perspectives,” the analysts added.
Seagen shares closed at $199.60 yesterday.
