RTW Biotech Opportunities (RTW ) has promised to deliver $30m (£23.6m) as it looks to sway shareholders in acquisition-target Arix to sign off on the deal following its purchase of a 25.5% stake.

The Guernsey-listed fund, which is trading on an almost 25% discount to the end of December net asset value (NAV) of $1.90, has seen its NAV and share price increase since its proposal to purchase Arix was announced. However, the fact shareholders in the former Neil Woodford favourite would receive highly discounted and illiquid shares has caused consternation.

The board of the investment company is therefore promising to return $30m to shareholders, including a previously announced $10m buyback, of which $2.8m has already been executed.

‘The board believes that this allocation clearly demonstrates its confidence in the outlook for the biotech sector and the company’s portfolio and its capital allocation discipline whilst also providing additional liquidity to shareholders,’ a stock exchange statement said on Monday.

At the end of December, the company had 12.9% of its net asset value in cash and another 20.4% in ‘other public’ stocks as an invested liquidity pool ‘designed to mitigate the drag’ of setting aside cash for future investment.

The promise of more capital came as RTW completed its $57m cash acquisition of Acacia’s 25.5% stake in Arix. RTW benefited from a weakening dollar-pound rate since the deal was signed which meant the purchase price was 137p per Arix share, down from 143p when the deal was announced.

The acquisition of the remaining stake is expected to be more difficult and requires shareholder approval at a general meeting and last year Arix’s corporate broker Peel Hunt resigned over the preferential treatment of Acacia.

However, the recent increase in RTW’s NAV has boosted the implied valuation to 159p, a 62% premium, compared with the 46% premium at the time of the deal’s announcement, making it a much better deal for Arix shareholders.

The closed-end company added that two proxy advisers have published recommendations in favour of the acquisition.

Roderick Wong, chief investment officer of RTW Investments, the company’s investment manager said: ‘We believe this combination will create immense value and opportunity for both RTW BIO and Arix shareholders and are pleased two leading proxy advisory firms have published recommendations in favour of the Arix Scheme.

‘We look forward to closing this transaction and leveraging our talented investment team and scientific expertise to unlock value day one and drive long-term value in an enhanced RTW BIO for all of our future combined shareholders.’