February 09, 2024 | Health Care | Europe | Ended

MorphoSys / Novartis: Deal Insight

On 5-Feb-24, Swedish drug maker Novartis agreed to acquire German cancer drug developer MorphoSys for €2.7bn. Under the business combination agreement and subject to the German Takeover Act, Novartis will launch a voluntary public takeover offer to acquire MorphoSys for €68 per share, an 89.3% premium to the target’s undisturbed price on 25-Jan-24, before media speculation emerged. Merger agreement clauses regarding representations, warranties, and covenants are mostly customary, with MAC carve-outs for war and pandemic situations. Regulatory filings will be submitted within 15 business days, by 26-Feb-24, and the offer document is expected to be published “at a later date”, pending approval from the German regulator, BaFin. In accordance with US securities law, Novartis will file the offer document and a tender offer statement on Schedule TO, while MorphoSys will file a recommendation statement on Schedule 14D-9 with the SEC. Novartis estimates that submitting the offer document and BaFin’s review – the regulator has a review period of 10 business days, extendable by an additional five business days – will take approximately four to eight weeks. Following the publication of the offer document, MorphoSys’s management and supervisory boards will issue a joint reasoned statement, containing their recommendation to shareholders. Of note, the agreement includes a ‘no-shop’ on MorphoSys, along with customary fiduciary out provisions, while the termination fee is €50m and the RTF is €100m. Once launched and per German Takeover law, the acceptance period must be open for at least four weeks and shall not exceed 10 weeks. Novartis anticipates the initial offer period will last for four weeks, and two week additional acceptance period will follow. The offer will be subject to ...

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