Pfizer bolsters ResApp (ASX:RAP) takeover offer following independent expert report – The Market Herald

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  • Pfizer bolsters its takeover bid for WA-founded ResApp Health (RAP) after an independent expert report found ResApp’s current share price was undervalued
  • The pharmaceutical giant is now offering either 20.7 cents or 14.6 cents per RAP share depending on the upcoming results of ResApp’s cough-based COVID-19 detection test
  • The top end of the new offer values ​​ResApp at $180 million and nearly doubles Pfizer’s initial bid of 11.5 cents per RAP share
  • The results read-out for ResApp’s cough test is slated for around June 20, with the Pfizer deal to be implemented by mid to late August if all goes according to plan
  • Shares in ResApp are soaring 50 per cent higher to 16 cents at 1:51 pm AEST

Pfizer has bolstered its takeover bid for WA-founded ResApp Health (RAP) after an independent expert report found ResApp’s current share price was undervalued.

Pfizer’s Australian arm will now offer 20.7 cents per share for full control of ResApp if the ASX-listed meditech business can repeat the success of its cough-based COVID-19 detection test as per its pilot study in March. If ResApp cannot repeat the results, Pfizer will drop its offer to 14.6 cents per share.

In any case, both scenarios under the new bid are higher than Pfizer’s initial offer of 11.5 cents per ResApp share, which was supported by ResApp’s board.

The revised offer price comes after an independent expert review valued RAP shares at between 14.6 cents and 27.7 cents, with a preferred value of 20.7 cents.

The top end of the new Pfizer offer values ​​RAP at some $180 million — almost double the initial $100 million valuation from the pharmaceutical giant.

ResApp CEO and Managing Director Tony Keating said the new offer represented a “material increase” in the consideration to be received by shareholders of the company.

“The board believes this offer provides an attractive premium to the undisturbed ResApp share price, reduces the risk for shareholders by providing certainty through an all-cash offer, while also valuing the upside potential of these COVID-19 results,” Mr Keating said.

“We believe that it represents significant value for all shareholders and the ResApp board strongly recommends shareholders vote in favor of the transaction in the absence of a superior proposal.”

With the results read-out for ResApp’s cough test slated for around June 20, the company said it expected to dispatch the scheme booklet for the Pfizer takeover in July, with the deal to be implemented by mid to late August.

Shares in ResApp broke out of a trading halt to soar 50 per cent this afternoon, strongly outperforming a bleeding market and trading at 16 cents at 1:51 pm AEST.