The ResApp Health Ltd (ASX: RAP) share price has exploded higher on Monday morning.
At the time of writing, the digital health company’s shares are up a whopping 28% to 11.5 cents.
Why is the ResApp share price rocketing higher?
The ResApp share price is rocketing higher this morning after the company revealed that it has received a takeover offer from healthcare giant Pfizer.
According to the release, ResApp has entered into a binding scheme implementation deed with Pfizer, under which it will be acquired by way of a scheme of arrangement for 11.5 cents per share in cash. This represents a total equity value of approximately $100 million.
Subject to the independent expert determining that the scheme is in the best interests of ResApp shareholders, and in the absence of a superior proposal, the company’s directors unanimously recommend that ResApp shareholders vote in favour of the scheme. They intend to vote shares under their control in favour of the proposed scheme.
This takeover approach comes less than three weeks after ResApp announced positive results for a new novel smartphone-based COVID-19 screening test. These results appear to have caught the eye of Pfizer, which has moved quickly to acquire the company.
ResApp’s CEO and Managing Director, Tony Keating, commented: “We are excited by the prospect of this acquisition by Pfizer, a leading biopharmaceutical company that shares our vision and belief that technology can help transform healthcare and improve patients’ lives.”
“The proposed acquisition recognises the years of dedicated work by the ResApp team to build ResApp into a leader in audio-based analysis of respiratory health. We believe that the material premium and certainty of an all-cash consideration is an attractive outcome for our shareholders,” Keating added.
ResApp has advised that shareholders needn’t take any action at the present time. A scheme meeting is expected in mid June.
Today’s gain means the ResApp share price is now up over 80% since this time last month.