- Special cash dividend of $69.6 million ($2.40 per share) to be distributed to Aerovate Therapeutics (AVTE, Financial) shareholders.
- Merger with Jade Biosciences approved, leading to a 1-for-35 reverse stock split.
- New entity, Jade Biosciences (JBIO), to begin trading on Nasdaq on April 29, 2025.
Aerovate Therapeutics (AVTE) announced stockholder approval of its proposed merger with Jade Biosciences, as well as all related proposals, during a special meeting on April 16, 2025. A significant development of this merger is the 1-for-35 reverse stock split. This move will drastically reduce the number of outstanding shares of Aerovate from approximately 30.0 million to about 0.8 million, primarily to meet the Nasdaq listing requirements.
In addition to approving the merger, Aerovate’s stockholders agreed to increase the authorized common stock from 150 million to 300 million shares. This strategic decision indicates potential future capital-raising activities for the combined entity.
Shareholders will receive a notable special cash dividend totaling $69.6 million, equivalent to $2.40 per share. This dividend will be distributed based on pre-split holdings to stockholders of record as of April 25, 2025. Given Aerovate's current market capitalization of $77.1 million, the dividend represents a significant return of value to the shareholders, approximating 87% of the company's current share value.
Upon completion of the merger, the newly formed company, Jade Biosciences (JBIO), is set to commence trading on Nasdaq starting April 29, 2025. The new entity is expected to have around 32.2 million shares outstanding, or 60.6 million fully diluted shares. The shift from AVTE to JBIO marks Jade's dominant position in the merger, where original Aerovate shareholders will hold approximately 2.4% of the combined company post-transaction.
The transaction structure aims to balance immediate shareholder returns through dividends with a continued, albeit minority, stake in the merged enterprise, presenting potential future growth opportunities.
