Morning Commentary: Alder Biopharmaceuticals surges on takeout news; Transocean active

By Rebecca Melvin

New York, Sept. 16 – Alder Biopharmaceuticals Inc.’s convertibles surged more than 20 points on an outright basis in active trade early on Monday after it was announced that the Bothell, Wash.-based developer of therapeutic monoclonal antibodies has signed a definitive agreement to be acquired by H. Lundbeck A/S.

The Alder 2.5% convertibles due 2025 traded up to 108.5 to 109.1 from about 88 last, with the underlying shares up $8.36, or 83%, to $18.42.

Lundbeck will commence a tender offer for all Alder shares for $18.00 per share in cash and one non-tradeable contingent value right that lifts the total potential consideration to $20.00 per share.

Elsewhere, Transocean Ltd.’s 0.5% convertibles due 2023 were active in the early going, with shares of the company up 66 cents, or 11.5%, to $6.39. And Booking Holdings Inc. was also active.

Among mandatory convertibles, there was action in International Flavors & Fragrances Inc. among other mandatory issues, but otherwise the market was described as quiet. Peabody Energy Corp., the St. Louis based coal producer, was not heard as a name in convertibles trade after it announced that it is going to be selling $900 million of straight notes.

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