Will Baxalta (BXLT) Acquire Ariad Pharmaceuticals (ARIA)?

Ariad Pharmaceuticals, Inc. (NASDAQ: ARIA) | Baxalta Incorporated (NYSE: BXLT)

Ariad Pharmaceuticals was up in a big way Friday after rumors started to surface that Baxalta had its eye on taking the company over. However, ARIA is down today and few seem to be talking about a takeover. So today, we’ll talk about the likelihood of ARIA being acquired by BXLT, what we’re seeing in the market today, and what we can expect to see moving forward.

Is BXLT Going To Acquire ARIA?

In many cases, acquisition rumors can cause a stock to skyrocket; only to find that the rumors aren’t true and the stock falls like a brick. However, in this particular case, I don’t think what we’re seeing is a rumor. If you haven’t heard yet, reports have been covering the idea that Baxalta is in talks to buy Ariad Pharmaceuticals. While rumors do happen, they generally start on lesser-known websites with very little reputation to protect. However, the story of the possible Ariad Pharmaceuticals takeover by Baxalta broke on Bloomberg; a highly respected finance news source.

Personally, I believe that the rumors are anything but rumor. Ariad Pharmaceuticals is the developer of an array of leukemia and lung cancer treatments. Baxalta, like many other companies in biotech has been interested in furthering its oncology business; and acquiring Ariad could be just the way for them to do that. So, the reason behind the possible acquisition also makes sense. While Baxalta is not commenting on the matter, all signs are pointing to the fact that ARIA may just be acquired by BXLT.

It is important to keep in mind that the Bloomberg report explained that there was no clear deal on the table as of yet; and that the idea of a deal actually going through is up in the air at the moment. However, considering the desire on Baxalta’s part to further their oncology research, and Ariad’s history in the industry, the acquisition definitely makes sense.

What We’re Seeing In The Market Today

While Ariad Pharmaceuticals climbed by more than 40% on Friday as a result of the news, the stock isn’t doing so hot today. As a matter of fact, ARIA is currently (11:18) trading at $9.44 per share after a decline so far today of 4.55%.

What We Can Expect To See Moving Forward

According to the Bloomberg post, no deal is defined and on the table yet, ARIA and BXLT are simply in talks. If a deal is made, it is likely to prove to push both ARIA and BXLT up in the market. However, until then, I think we’re likely to see more declines in ARIA. The reality is that investors overreacted to the report made by Bloomberg; sending the stock up in a big way. However, without an actual deal on the table, there’s no viable reason for ARIA to be trading so high. Nonetheless, this is definitely going to be a story to watch as it continues to unfold.

What Do You Think?

Do you think Baxalta will acquire Ariad? Why or why not? Let us know in the comments below!

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  1. I believe it was a confirmed offer of 2billion(10.6pps) from Baxalta. However, ARIAD rejected this offer. If the negotiations are continuing, also reported, we can expect an offer price greater than 2B. Why would you suggest Ariad price to decline if the offer for 2B sets the table/ base price at 10.6?


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