The FINANCIAL — Sanofi-Aventis and Zentiva N.V. (“Zentiva”) on September 22 announced an agreement on the unanimous recommendation by Zentiva of an intended improved all-cash public offer of CZK 1150 per share (the “Improved Offer) by Sanofi-Aventis’ wholly-owned subsidiary Sanofi-Aventis Europe to acquire all issued ordinary shares (including shares held in the form of GDSs) in the share capital of Zentiva.
According to Sanofi-Aventis, the agreement leading to the Improved Offer was unanimously approved by the Board of Directors of Zentiva, and the Board recommends that Zentiva shareholders tender their shares to Sanofi-Aventis Europe. Both the decisions to approve the agreement and to recommend the Improved Offer were taken without the participation of the two Directors related to Sanofi-Aventis Europe. A fairness opinion has been provided by Merrill Lynch International, which acted as financial advisor to Zentiva.
In support of the Improved Offer, Sanofi-Aventis Europe has received an irrevocable and unconditional undertaking from Mr Jiri Michal to tender his Zentiva shares, representing approximately 3.4 per cent. of Zentiva’s share capital and voting rights on an undiluted basis, into the Improved Offer. Other members of Zentiva’s management have undertaken to tender their Zentiva shares representing in the aggregate an additional approximately 2.3 per cent. of Zentiva’s share capital and voting rights on an undiluted basis.
The agreement between Zentiva and Sanofi-Aventis Europe regarding implementation of the Improved Offer also includes, inter alia, a non-solicitation clause, matching rights, provisions relating to the termination of the agreement in certain circumstances, and a break fee of € 25 million in the event that Zentiva withdraws its recommendation of the Improved Offer.
Highlights of the Improved Offer
Sanofi-Aventis Europe will offer CZK 1150 in cash per Zentiva share. It is also intended that this Improved Offer extend to shares held in the form of Global Depositary Shares (GDSs) mutatis mutandis.
The offer price of CZK 1150 per share will represent a 25.5 % premium over Zentiva’s closing price of CZK 916.60 on April 30, 2008, the last trading day before an intention to make an offer for Zentiva was announced, and an improvement of 9.5 % over Sanofi-Aventis Europe’s initial offer price.
All other terms and conditions of Sanofi-Aventis Europe’s Improved Offer will remain unchanged and in particular, the Improved Offer will remain subject to obtaining required clearances from competition authorities and to the same minimum tender condition of 10,339,203 shares (including shares held in the form of GDSs) such that upon closing of the Improved Offer Sanofi- Aventis Europe would hold directly or indirectly over 50.0% of Zentiva’s fully diluted share capital and voting rights as calculated by aggregating (i) the Zentiva shares already held directly or indirectly by Sanofi-Aventis Europe prior to the Improved Offer with (ii) the Zentiva shares (including shares held in the form of GDSs) which will be tendered in the Improved Offer and are not validly withdrawn at the Announcement Date. Sanofi-Aventis Europe currently holds 9.5 million shares, representing approximately 24.88% of Zentiva’s share capital and voting rights on an undiluted basis. The Improved Offer expiration date will remain 28 November 2008, unless extended.
Implementation of the Improved Offer
In order to propose the Improved Offer price to Zentiva shareholders, Sanofi-Aventis Europe will submit an amendment to the original offer to the Czech National Bank in draft form. Subject to the Czech National Bank not prohibiting publication of the amendment within five business days, Sanofi-Aventis Europe will publish the amendment in an advertisement to be placed in the Czech daily newspaper Hospodarske noviny as soon as possible. The Improved Offer will take effect only upon publication of this announcement.
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