RTW Biotech Opportunities (RTW) has provided an update on Arix and its capital allocation plan. RTW has now completed the previously announced $57.1m acquisition of a 25.5% stake in Arix. RTW intends to utilise its stake to vote in favour of the “Arix scheme” at Arix’s forthcoming AGM. RTW intends to leverage its position in Arix to support the previously announced all-share acquisition of Arix’s assets by RTW, implemented through a scheme of reconstruction and the voluntary winding-up of Arix. RTW notes that two leading proxy advisors to Arix are recommending to shareholders to vote in favour of the scheme.
With the purchase being completed Arix is expected to publish the shareholder circular to convene the second general meeting in connection with the scheme. Subject to the meeting, the scheme is expected to become effective in Q1 2024.
RTW’s board has decided to proactively address the discount which RTW trades on (currently 28%) following the completion of the Arix scheme, which will only increase the scale of the trust, and thus compound the valuation disconnect. The board intends to implement a $30m share buyback upon completion of the scheme. This total includes the previously announced share buyback of up to $10 million, of which c.$2.8 million has already been executed.