US firm set to snap up Woodford's biotech holdings for $300m - reports
Acacia Research Corporation in talks with Link Fund Solutions
US-based Acacia Research Corporation is set to acquire a portfolio of biotech holdings owned by Woodford Investment Management for $300m, according to reports.
The portfolio, which comprises assets in the stricken LF Equity Income fund (EIF), includes the likes of Theravance Biopharma, Oxford Nanopore and Rutherford Cancer Centres, according to Sky News.
The deal could be finalised as soon as Wednesday (3 June), according to insiders, though it could still fall apart.
Acacia is part-owned by US activist hedge fund Starboard Value. Its backer, or other outside investors, is likely to have to put up a large part of the cash, with Acacia's market capitalisation standing at $120m.
Woodford fund suspension one year on: Liquidity mismatch remains 'elephant in room'
The Covid-19 crisis has slashed the value of the portfolio Acacia wants to snap up. Sky News reported a consortium led by WG Partners failed to strike a deal worth £550m in February.
Woodford, alongside former colleague Craig Newman, has also tabled an offer for the portfolio, alongside Abu Dhabi-based sovereign wealth fund Mubadala.
Adrian Lowcock, head of personal investing at Willis Owen, said that if true the deal "could be the miracle investors have been waiting for", despite the writedown.
"Trapped savers who put billions into Woodford's flagship fund have seen their money locked up for a year now, so hopefully this news comes to fruition and enables them to get some more of their money back," he said.
"Of course, there will be questions about what value should be put on those companies, but at this stage, something would be better than nothing for investors, many of whom were concerned costs were eroding the remaining value of the fund."
The news comes a fortnight after it was announced Link Fund Solutions, EIF's authorised corporate director, had sold out of its entire stake in Schroders UK Public Private Trust, formerly Woodford Patient Capital Trust.
Around £560m of investors' capital remains trapped in EIF.
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