Incyte announces intention to repurchase up to $2B common stock

Incyte announced that its board of directors approved a share repurchase authorization of $2B. The company has commenced a modified Dutch Auction tender offer to repurchase shares of its common stock for an aggregate purchase price of up to $1.672B. In addition, on May 12, Incyte entered into a separate stock purchase agreement with Julian Baker, Felix Baker, and entities affiliated with Julian and Felix Baker, including funds advised by Baker Bros. Advisors, to repurchase up to $328M of the company’s common stock. This would enable the Baker Entities to maintain their current ownership level of approximately 16.4% of Incyte’s outstanding common stock. The Baker Entities purchase will be at the same price per share as is determined and paid in the tender offer. Incyte is offering to purchase up to $1.67B in value of its common stock at a price not greater than $60.00 per share nor less than $52.00 per share, net to the seller in cash, less any applicable withholding taxes and without interest, upon the terms and subject to the conditions set forth in the tender offer documents that are being distributed to stockholders. The company reserves the right, in its sole discretion, to change the per share purchase price options and to increase or decrease the aggregate value of shares sought in the tender offer, subject to applicable law. In accordance with the rules of the SEC, Incyte may purchase in the offer up to an additional 2% of its outstanding shares without amending or extending the tender offer. On May 10, the Nasdaq closing price of the common stock was $53.06 per share. The tender offer will expire at 12:00 midnight, at the end of the day, New York City time, on Monday, June 10, unless extended. The company has entered into a stock purchase agreement with the Baker Entities. Under the stock purchase agreement, the Baker Entities have agreed not to tender or sell any shares in the tender offer and instead have agreed to sell to the company, following completion of the offer, a pro rata number of shares based on the number of shares that the company purchases in the offer such that the Baker Entities’ aggregate percentage ownership in the company will be substantially equal to the Baker Entities’ current levels. The Baker Entities Purchase will be at the same price per share as is determined and paid in the offer and is expected to occur on the 11th business day following the expiration of the offer. The closing of the Baker Entities Purchase is subject to the completion of the offer. Assuming that the offer is fully subscribed, the aggregate purchase price for the shares purchased pursuant to the stock purchase agreement is anticipated to be approximately $328M. The Baker Entities, in the aggregate, own 36,833,933 shares of common stock, representing in the aggregate beneficial ownership of approximately 16.4% of outstanding common stock as of May 9. If the tender offer is fully subscribed, the company would repurchase a total of approximately $2B of its common stock through the tender offer and the stock purchase agreement.