Incyte Corporation (Nasdaq:INCY) announced today that its Board of Directors has greenlit a $2.0 billion share repurchase program. As part of this initiative, the company has initiated a modified “Dutch Auction” tender offer, aiming to buy back shares of its common stock for a total purchase price of up to $1.672 billion.
Hervé Hoppenot, Chief Executive Officer of Incyte, stated, “This tender offer underscores our confidence in the future prospects of our business, the robustness of our commercial product portfolio, and the potential of our clinical development pipeline. We view the current valuation of Incyte stock as favorable for stock repurchases, presenting an opportunity to bolster long-term shareholder value. With our solid balance sheet, cash flow, and access to capital, we are well-positioned to execute this transaction while retaining the flexibility to pursue strategic acquisitions to fuel our growth.”
Additionally, on May 12, 2024, Incyte entered into a separate stock purchase agreement with Julian C. Baker, a member of Incyte’s Board of Directors, Felix J. Baker, and affiliated entities, including funds managed by Baker Bros. Advisors LP (collectively, the “Baker Entities”), to repurchase up to $328.0 million of the Company’s common stock. This arrangement aims to allow the Baker Entities to maintain their current ownership level of approximately 16.4 percent of Incyte’s outstanding common stock. The purchase price for the Baker Entities will match that determined and paid in the tender offer.
Regarding the modified “Dutch Auction” tender offer, Incyte is offering to purchase up to $1.672 billion worth of its common stock at a price ranging from $52.00 to $60.00 per share, net to the seller in cash. The tender offer is set to expire at 12:00 midnight, New York City time, on Monday, June 10, 2024, unless extended. Stockholders can tender their shares within this price range, and Incyte will determine the lowest price per share enabling it to acquire the targeted amount of common stock.
The tender offer is subject to various conditions detailed in the tender offer documents, and Incyte may purchase up to an additional 2 percent of its outstanding shares without amending or extending the offer, as per SEC rules. Stockholders are encouraged to carefully review the offer documents and consult financial advisors before deciding whether to tender their shares.
In a separate transaction, the stock purchase agreement with the Baker Entities stipulates that they will not participate in the tender offer but will sell a proportional number of shares to Incyte after its completion, maintaining their ownership percentage. This purchase will also be executed at the tender offer’s determined price per share and is anticipated to occur on the 11th business day following the offer’s expiration.
Assuming full subscription, Incyte anticipates repurchasing approximately $2.0 billion worth of its common stock through both the tender offer and the stock purchase agreement, representing approximately 14.8 percent to 17.1 percent of its outstanding shares as of May 9, 2024, depending on the purchase price.
