Investors Up Ante In Bid To Buy Biomet
July 28, 2016 at 4:25 p.m.
By Jen [email protected]
Late Wednesday evening, Biomet officials announced the group offered to increase the purchase price to $46 per share, which equals to about $11.4 billion.[[In-content Ad]]In April 2006, the private group of investors offered $44 per share for the company.
With the revised merger agreement, the group, which includes affiliates of the Blackstone Group, Goldman Sachs Capital Partners, Kohlberg Kravis Roerts & Co., and Texas Pacific Group, along with one of Biomet's founders, Dane A. Miller, would buy all the outstanding shares of Biomet's common stock before June 14.
Once those shares are purchased, any remaining shares of Biomet stock will be converted into the right to receive the same $46 price paid for the other stocks.
The $2 increase in the price per share is a 32.3 percent increase over the closing price of Biomet stock April 3, 2006, the day before the buyout became public speculation.
On April 6, 2006, Biomet announced it retained Morgan Stanley to help explore strategic alternatives.
According to information released by Biomet Wednesday, Morgan Stanley told Biomet's board of directors that "the revised merger agreement is fair from a financial point of view to holders of Biomet common stock."
"We believe the proposed price for the transaction is fair to Biomet's shareholders," said Niles L. Noblitt, chairman of the board of Biomet. "We also believe that the investor group's tender offer will deliver superior value to Biomet's shareholders in a more efficient and more immediate fashion than the process provided by the original merger agreement. Moreover, this revised offer provides greater certainty and visibility to completion of the transaction."
In a statement, the sponsor group said: "Our offer empowers current shareholders who have an economic interest in Biomet common shares to realize significant value in a timely manner and represents the absolute limit of our ability to structure an appropriate buyout of Biomet. We are pleased that the consortium will be in a position to provide the company with financial and operational resources to support its future growth."
One condition of the offer is that at least 75 percent of the Biomet common shares are sold in the offer, the same condition outlined in the original merger offer.
According to information released by Biomet, "The amended merger agreement permits the investor group to revise the condition regarding minimum acceptance of the tender offer to decrease the minimum acceptance threshold to a number that, together with shares whose holders have agreed to vote to approve the second-step merger, represents at least 75 percent of the Biomet common shares. The tender offer will expire at midnight, New York time, on the 20th business day following and including the commencement date, unless extended in accordance with the terms of the offer and the applicable rules and regulations of the Securities and Exchange Commission. The tender offer and subsequent merger are subject to customary conditions for transactions of this type."
A special shareholders meeting to vote on the original merger agreement originally scheduled for Friday was cancelled because of the new proposal. As part of the new agreement, Biomet also agreed not to pay its annual dividend.
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Late Wednesday evening, Biomet officials announced the group offered to increase the purchase price to $46 per share, which equals to about $11.4 billion.[[In-content Ad]]In April 2006, the private group of investors offered $44 per share for the company.
With the revised merger agreement, the group, which includes affiliates of the Blackstone Group, Goldman Sachs Capital Partners, Kohlberg Kravis Roerts & Co., and Texas Pacific Group, along with one of Biomet's founders, Dane A. Miller, would buy all the outstanding shares of Biomet's common stock before June 14.
Once those shares are purchased, any remaining shares of Biomet stock will be converted into the right to receive the same $46 price paid for the other stocks.
The $2 increase in the price per share is a 32.3 percent increase over the closing price of Biomet stock April 3, 2006, the day before the buyout became public speculation.
On April 6, 2006, Biomet announced it retained Morgan Stanley to help explore strategic alternatives.
According to information released by Biomet Wednesday, Morgan Stanley told Biomet's board of directors that "the revised merger agreement is fair from a financial point of view to holders of Biomet common stock."
"We believe the proposed price for the transaction is fair to Biomet's shareholders," said Niles L. Noblitt, chairman of the board of Biomet. "We also believe that the investor group's tender offer will deliver superior value to Biomet's shareholders in a more efficient and more immediate fashion than the process provided by the original merger agreement. Moreover, this revised offer provides greater certainty and visibility to completion of the transaction."
In a statement, the sponsor group said: "Our offer empowers current shareholders who have an economic interest in Biomet common shares to realize significant value in a timely manner and represents the absolute limit of our ability to structure an appropriate buyout of Biomet. We are pleased that the consortium will be in a position to provide the company with financial and operational resources to support its future growth."
One condition of the offer is that at least 75 percent of the Biomet common shares are sold in the offer, the same condition outlined in the original merger offer.
According to information released by Biomet, "The amended merger agreement permits the investor group to revise the condition regarding minimum acceptance of the tender offer to decrease the minimum acceptance threshold to a number that, together with shares whose holders have agreed to vote to approve the second-step merger, represents at least 75 percent of the Biomet common shares. The tender offer will expire at midnight, New York time, on the 20th business day following and including the commencement date, unless extended in accordance with the terms of the offer and the applicable rules and regulations of the Securities and Exchange Commission. The tender offer and subsequent merger are subject to customary conditions for transactions of this type."
A special shareholders meeting to vote on the original merger agreement originally scheduled for Friday was cancelled because of the new proposal. As part of the new agreement, Biomet also agreed not to pay its annual dividend.
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