Astex's board of directors agreed to provide additional compensation
From Street Insider:
n addition, Astex's board of directors agreed to provide additional compensation to certain company executive officers subject to consummation of the merger. This executive compensation includes a $2 million payment to Chairman of the Board and Chief Financial Officer, James Manuso; and a $253,440 payment to Astex's Chief Medical Officer, Mohammad Azab.
manuso owned all of 6400 shares as of a couple of months ago and had exercised and immediately sold approx 98k options in march and may for about a $202k pretax profit.
As of june 21, manuso held over 5.42mm options presumably mostly with low strike prices, so i'm guessing he's clearing at least $7 pretax profit per option, and no doubt at favorable lt cap gains rate.
meanwhile, upon change of control, he reaps the $2mm payment (noted by buysell1929) AND $675k '2013 on target bonus'. As well, he was paid $1.32mm in 2012, and the five top compensated officers wer paid over $4.0mm as a group. All five of them own more options than shares, most by a lot. so the motivation to do an m&a deal is abundantly clear in terms of accelerating compensation to the top officers.
one of the main reasons the transaction was agreed to now may well be that the dacogen royalty stream will likely start to shrink as generic competition bares its price competition fangs.
finally, there is a $31mm breakup fee should astx not be acquired by otsuka, or about 3.5% of the indicated $870mm deal value. brean murray and others believe astex is worth a whole lot more than $900-$930mm, which is why the stock continues to trade well north of the $8.50/sh offer.