Last close As at 20/08/2026
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Research: Investment Companies
On 1 November 2023, RTW Biotech Opportunities (RTWBIO), a full life cycle biotech investor, announced what it considers to be a transformational deal. It plans to acquire the assets of UK-listed Arix Bioscience in an all-share transaction, which on a pro-forma basis would increase RTWBIO’s NAV by c $550m (c 63%). The deal brings the prospects of increased liquidity in RTWBIO’s shares and a more efficient cost base, and potential for a higher RTWBIO valuation. Arix’s shareholders would receive new RTWBIO shares at an implied c 46% premium to the level before Arix announced a strategic review. Meanwhile, RTWBIO’s management team anticipates that the deal would be single-digit accretive to the company’s NAV per share at completion.
RTW Biotech Opportunities |
Significant acquisition of Arix Bioscience’s assets |
Investment trusts |
1 November 2023 |
Analyst
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On 1 November 2023, RTW Biotech Opportunities (RTWBIO), a full life cycle biotech investor, announced what it considers to be a transformational deal. It plans to acquire the assets of UK-listed Arix Bioscience in an all-share transaction, which on a pro-forma basis would increase RTWBIO’s NAV by c $550m (c 63%). The deal brings the prospects of increased liquidity in RTWBIO’s shares and a more efficient cost base, and potential for a higher RTWBIO valuation. Arix’s shareholders would receive new RTWBIO shares at an implied c 46% premium to the level before Arix announced a strategic review. Meanwhile, RTWBIO’s management team anticipates that the deal would be single-digit accretive to the company’s NAV per share at completion.
The deal will be structured using an RTWBIO subsidiary via a scheme of reconstruction and a voluntary winding up of Arix under the Insolvency Act 1986. The proposed terms value each Arix share at £1.43, which is a c 46% premium to the £0.98 per share on 12 July 2023 (the business day before Arix announced a strategic review).
Via its subsidiary, RTWBIO expects to enter into an agreement to acquire a c 25.5% interest in Arix from Acacia Research Corporation’s (Arix’s largest shareholder) for £1.43 per share in cash. Subject to regulatory and shareholder approval, this acquisition is expected to close in Q124.
Following completion of the deal, Arix shareholders are expected to own c 38.8% of the combined company, with RTWBIO’s shareholders owning c 61.2%. The boards of both companies consider that the acquisition is in the best interests of all shareholders involved, and is occurring during a time when robust biotech industry fundamentals appear to be underappreciated by investors.
RTW is a leading global life sciences investor whose full life cycle approach aims to generate superior returns by supporting growth companies at different stages of their development. It has a team of 43 investment professionals, the majority of whom have advanced scientific qualifications, that builds, supports and invests in innovative life science companies aiming to solve challenging unmet patient needs. Compared with Arix’s focus on private and venture capital investing in life sciences, RTW offers a broader range of investment and financing options.
During 2022 and so far in 2023, RTWBIO has made nine new investments and had seven successful IPOs or exits of portfolio companies. The acquisition would bring c $128m of Arix’s liquid assets, of which c $60m is expected to be in cash following completion of the scheme and the cost of the deal. RTWBIO intends to invest this capital in both public and private assets and can deploy cash quickly via investment in its ‘other public’ portfolio, which is made up of listed companies held by other RTW funds, to minimise cash drag. It can also deploy capital through its royalty and structured finance strategy, which provides an income stream with returns that are uncorrelated with equity returns and stock market volatility.
We will cover the Arix transaction in more detail in our upcoming RTWBIO review.
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Investment Companies
Research: Investment Companies
Murray Income Trust (MUT) is currently celebrating two key milestones. This year marks its 100-year anniversary, and 50 years of consistently rising dividends. MUT’s FY23 dividend of 37.5p (up from 36.0p in FY22) represents a current yield of 4.7% and MUT’s board has stated that maintaining the trust’s record of annually increasing dividends remains a priority. Performance has improved after a rare bout of underperformance last year. In the year ended September 2023, MUT returned 14.5%, in line with the benchmark, and in the 10 years to September, it delivered an average annual return of 6.1% on an NAV basis, versus a market return of 5.6%. The trust’s managers, Charles Luke and Iain Pyle, are confident its exposure to some ‘unstoppable long-term trends’ means it is well-positioned to continue delivering positive returns and growing income over the long term.