Thoughts on Ligand Spin-off, OmniAB, and RemainCo

November 1, 2022

Summary

Ligand (LGND) is on track to close the merger of its OmniAb business with Avista Public Acquisition Corp II (AHPA) on November 1, 2022. Subsequent to the merger, Ligand (LGND) will spin off its ~85% stake in the business. The new company will trade under the ticker OABI.

LGND shareholders will receive 4.9 shares of OABI for every share of LGND (shareholders will also receive “earnout shares” which I’m ignoring because they will begin trading way out of the money.

The spin-off is trading in the when-issued market currently at a price of $6.95. This implies a market cap of $800 and an enterprise value