Ligand to Acquire XOMA for $39 per Share plus Contingent Value Rights

*TL;DR: Ligand will purchase XOMA for $39 in cash per share and issue contingent value rights tied to future payments; a $40 million fee applies if the merger is terminated under certain conditions.

Context On April 27, 2026, XOMA signed a merger agreement with Ligand and Ligand’s wholly‑owned subsidiary, Flex Merger Sub, Inc. The agreement outlines a holding‑company reorganization that will make XOMA a wholly owned subsidiary of Ligand. Shareholder approval, antitrust clearance and completion of the reorganization are required before the merger becomes effective.

Key Facts - Each XOMA common share converts to $39 cash, paid without interest and subject to tax withholding. - Shareholders also receive contingent value rights (CVRs), which grant rights to future payments derived from the CVR Trust’s interest in RemainCo LLC. - Preferred shares convert into the same cash and CVR package based on their conversion ratios. - Perpetual preferred stock (Series A and B) will be redeemed before the merger closes, with accrued dividends paid. - If the merger is terminated for specified reasons, XOMA must pay Ligand a $40 million termination fee. - The agreement includes standard representations, warranties and covenants, a “no‑shop” clause preventing XOMA from seeking other buyers, and a board recommendation to approve the deal.

What It Means The cash component offers XOMA shareholders an immediate, fixed return, while the CVRs tie part of the payout to the performance of RemainCo LLC, a post‑merger entity. This structure aligns incentives: Ligand secures control of XOMA’s assets, and shareholders retain upside potential if RemainCo generates value. The $40 million termination fee serves as a deterrent against unwarranted deal abandonment, protecting Ligand’s investment.

Investors should monitor shareholder voting results, antitrust clearance timelines, and the progress of the holding‑company reorganization. The valuation of the CVRs will depend on RemainCo’s future earnings, making subsequent performance reports a key indicator of total deal value.