Rallybio Estimates $82.7 Million Cash Distribution in Avenzo Merger
Key Facts
Rallybio’s board announced on October 25 a special cash distribution tied to the company’s merger with Avenzo, estimating its total value at about $82.7 million, or $13.56 per share. Eligible recipients include shareholders and holders of pre-funded warrants who meet the applicable conditions. The company tied the amount to net cash above zero under the merger agreement, to be determined before the deal closes. It said the actual value could be higher or lower than the announced estimate. This means the final distribution amount depends on the net cash calculation at closing, not solely on the current estimate.
Rallybio calculated the estimate of $13.56 per share based on 6,378,168 common shares and equivalents outstanding as of October 21, 2026. The calculation base includes common shares and equivalents, while the disclosure identifies shareholders and holders of pre-funded warrants as eligible distribution recipients. The distribution mechanism is based on net cash remaining above the zero threshold as defined in the merger agreement. The announced figure therefore remains an estimate until the calculation is completed before closing. Announcing the estimated value does not change the eligibility conditions or the need for shareholder approval.
The announcement comes as the two companies proceed with a merger agreed on June 1, 2026, under which Avenzo will merge with Rallybio and the combined company will operate as Avenzo Therapeutics and trade under the ticker AVZO. Avenzo announced at the time a concurrent private financing with a total value of $215 million to support the combined company. The companies said the expected funding would cover operating expenses through late 2028 and support the advancement of four clinical programs. In its October 15 proxy statement, Rallybio estimated net cash at about $82.2 million as of August 15, based on June 30 balances and estimates for other items. The company cautioned that available cash would decline as losses continued, placing the final distribution calculation within the deal’s financial terms.
Payment of the distribution is contingent on receiving the required shareholder vote at the annual meeting scheduled for November 4, 2026, at 10:00 a.m. Eastern Time. The company set November 5 as a proposed record date for recipients, which could change depending on the timing of the shareholder meeting. It also plans to deposit the amount with the transfer agent on November 5, with payment scheduled for November 13. Rallybio expects to complete the merger on or around November 6, subject to shareholder approval and the satisfaction or waiver of the agreement’s conditions. The June announcement had expected closing in the fourth quarter of 2026, before the company later set a nearer date in November.
A due bills mechanism is expected to apply to trading in the stock from November 4 to November 6. During this period, the buyer of the stock is entitled to the distribution under the disclosure, while the seller is obligated to deliver it to the buyer. This window coincides with the expected shareholder meeting on November 4 and the anticipated closing on November 6. The due bills arrangement ties the transfer of the distribution entitlement to trading in the stock during the specified period, alongside the proposed record date. The dates remain subject to the meeting schedule and the deal’s closing procedures.
The S-4 registration statement was declared effective by the Securities and Exchange Commission on October 15, 2026, and proxy materials and the prospectus were sent to shareholders at about that time. In trading before the announcement, RLYB closed at $16.64 on October 23, according to EL7 data. The proxy statement said the last closing price before its date was $16.91 on October 14. The two prices place trading in the period before the distribution announcement, without determining its effect on the stock on their own. The next steps remain the shareholder vote on November 4, followed by the expected merger closing on November 6.