Lilly's $7.8 billion Centessa acquisition clears UK court approval

The High Court of Justice of England and Wales approved Eli Lilly's $7.8 billion acquisition of Centessa Pharmaceuticals on Monday, clearing the way for the deal to close June 24 at $38 a share in cash plus up to $9 in milestone-linked contingent value rights.

"The court's sanction of the scheme of arrangement marks the final substantive step in the transaction process, with only the delivery of the court order to the registrar remaining," Centessa said in a statement Monday.

Centessa shareholders will receive $38 in cash per American depositary share plus one non-transferable contingent value right entitling them to as much as $9 a share tied to three milestones. The total consideration implies a transaction value of roughly $7.8 billion. Centessa ADSs will trade for the last time on Nasdaq on June 23, with trading halted before the open on June 24.

The deal gives Lilly control of Centessa's orexin receptor 2 agonist program, a pipeline targeting excessive daytime sleepiness, cognitive deficits and fatigue across neurological and neurodegenerative disorders. For Centessa investors, the CVR component introduces uncertainty — payments depend on achieving three specified milestones, and the rights are non-transferable, meaning holders cannot sell them separately.

The acquisition, first announced March 31, is structured as a court-sanctioned scheme of arrangement under English law. Centessa is incorporated in the UK but is not subject to the UK Takeover Code, the company said.

The $38 cash component alone represents a roughly 44% premium to Centessa's undisturbed share price before the deal was announced, based on the stock's reaction on March 31 when shares surged 44% in a single session. The stock traded at $40.02 ahead of Monday's court approval, near its 52-week high of $40.26, reflecting market confidence the deal would close.

Regulatory Path and Timeline

The transaction has already cleared the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act in the US and received shareholder approval. Monday's High Court sanction was the final approval needed. The scheme becomes effective once the court order is delivered to the Registrar of Companies, expected June 24.

Centessa's market capitalization stood at roughly $6.2 billion before Monday's announcement. Short interest was 2.75 percent of float as of May 29, representing 2.6 days to cover, suggesting limited speculative positioning against the stock.

What the CVR Means for Investors

The contingent value right, a structure common in biopharma M&A, offers up to $9 a share in additional payments if Centessa's pipeline hits three undisclosed milestones. Because the CVR is non-transferable, it will be delivered to shareholders who hold Centessa ADSs at closing and cannot be traded separately — a key distinction from transferable CVRs that can create a separate market.

For Lilly, the acquisition expands its neuroscience portfolio at a time when the company is diversifying beyond its blockbuster diabetes and obesity franchise. Centessa's OX2R agonist program represents a potential new class of therapies for excessive daytime sleepiness, a condition with limited treatment options.

This article is for informational purposes only and does not constitute investment advice.