Item 1.01 Entry into a Material Definitive Agreement.
Agreement and Plan of Merger
On
Subject to the terms and conditions of the Merger Agreement, each share of
Company common stock, par value
In addition, effective as of immediately prior to the Effective Time, (i) each outstanding Company stock option, whether vested or unvested, will be automatically canceled and converted into the right to receive an amount in cash, without interest, equal to the product of (A) the number of Company Shares underlying such option immediately prior to the Effective Time multiplied by (B) the amount, if any, by which the Merger Consideration exceeds the exercise price per share of such option, (ii) each outstanding Company restricted stock unit ("RSU") will be automatically canceled and converted into the right to receive an amount in cash equal to the product of (A) the number of Company Shares underlying such RSU immediately prior to the Effective Time multiplied by (B) the Merger Consideration, without interest and subject to any applicable withholding taxes and (iii) each outstanding share of restricted stock of the Company will automatically become fully vested and converted into the right to receive the Merger Consideration.
The Merger Agreement contains customary representations, warranties and covenants, including covenants obligating the Company to use commercially reasonable efforts to conduct its operations according to its ordinary course of business, to cooperate in seeking regulatory approvals and not to engage in certain specified activities without Parent's prior consent. In addition, subject to certain exceptions, the Company has agreed not to solicit, initiate, knowingly encourage, or knowingly facilitate, any inquiry, proposal or offer that constitutes or would reasonably be expected to lead to an Acquisition Proposal (as defined in the Merger Agreement), or take certain other restricted actions in connection therewith. Notwithstanding the foregoing, if the Company receives a written, bona fide Acquisition Proposal that did not result from a material breach of the non-solicitation provisions of the Merger Agreement that the Company's Board of Directors (the "Board") determines in good faith, after consultation with its financial advisor(s) and outside legal counsel, constitutes or is reasonably likely to lead to a Superior Proposal (as defined in the Merger Agreement), the Company may take certain actions to participate in discussions and negotiations and furnish information with respect to such Acquisition Proposal, after providing written notice to Parent of such determination.
The Company will prepare and file a proxy statement with the
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Company and the Board, as applicable, are permitted to take certain actions which may, as more fully described in the Merger Agreement, include changing the Company Board Recommendation and entering into a definitive agreement with respect to a Superior Proposal if, among other things, the Board has concluded in good faith after consultation with its outside legal counsel that the failure to take such action would be reasonably likely to be inconsistent with the Board's fiduciary duties under applicable law.
The Merger Agreement also contains certain customary termination rights in favor
of each of the Company and Parent, including the Company's right, subject to
certain limitations, to terminate the Merger Agreement in certain circumstances
to accept a Superior Proposal and Parent's right to terminate the Merger
Agreement if the Board changes its Company Board Recommendation. In addition,
either Parent or the Company may terminate the Merger Agreement if the Merger
has not been successfully completed by
The Board has unanimously (i) determined that the Merger Agreement and the transactions contemplated thereby, including the Merger, are advisable, fair to and in the best interests of the Company and its stockholders, and declared it advisable for the Company to enter into the Merger Agreement, (ii) approved and declared advisable the execution and delivery by the Company of the Merger Agreement, the performance by the Company of its covenants and agreements contained in the Merger Agreement and the consummation of the Merger and the other transactions contemplated by the Merger Agreement upon the terms and subject to the conditions contained therein, (iii) directed that the adoption of the Merger Agreement be submitted to a vote at a meeting of the holders of Company Shares and (iv) resolved, subject to the terms and conditions set forth in the Merger Agreement, to recommend that the holders of Company Shares adopt the Merger Agreement at such meeting of the Company's stockholders.
The foregoing description of the Merger Agreement and the transactions
contemplated thereunder is not complete and is qualified in its entirety by
reference to the Merger Agreement, a copy of which is hereby filed as Exhibit
2.1 to this Current Report on Form 8-K (this "Current Report") and incorporated
herein by reference. The Merger Agreement and the foregoing description thereof
have been included to provide investors and stockholders with information
regarding the terms of the Merger Agreement. They are not intended to provide
any other factual information about the Company. The representations, warranties
and covenants contained in the Merger Agreement were made only as of specified
dates for the purposes of such agreement, were solely for the benefit of the
parties to such agreement and may be subject to qualifications and limitations
agreed upon by such parties. In particular, in reviewing the representations,
warranties and covenants contained in the Merger Agreement and discussed in the
foregoing description, it is important to bear in mind that such
representations, warranties and covenants were negotiated with the principal
purpose of allocating risk between the parties, rather than establishing matters
as facts. Such representations, warranties and covenants may also be subject to
a contractual standard of materiality different from those generally applicable
to stockholders and reports and documents filed with the
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Item 7.01 Regulation FD Disclosure.
On
The information contained in this Item 7.01 and in Exhibit 99.1 of this Current Report shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference into any filing under the Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act, except as expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits. Exhibit No. Description 2.1* Agreement and Plan of Merger, dated as ofApril 15, 2023 , by and amongPrometheus Biosciences, Inc. , Merck & Co., Inc., andSplash Merger Sub, Inc. 99.1 Press Release, datedApril 16, 2023 . 104 Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.
* Certain exhibits and schedules have been omitted pursuant to Item 601(a)(5) of
Regulation S-K.
any of the omitted exhibits and schedules upon request by the
however, that the Company may request confidential treatment pursuant to Rule
24b-2 of the Exchange Act for any exhibits or schedules so furnished.
Forward-Looking Statements
This Current Report contains forward-looking statements within the meaning of
federal securities laws. Forward-looking statements in this Current Report
include, but are not limited to, statements regarding the consummation of the
transaction described above. These forward-looking statements involve a number
of risks and uncertainties that could cause actual results to differ materially
from those indicated in such forward-looking statements, including but not
limited to the ability of the parties to consummate the proposed Merger and the
possibility that various closing conditions for the proposed Merger may not be
satisfied or waived, and the ability to realize the benefits expected from the
proposed Merger. The forward-looking statements in this Current Report are based
on information available to Prometheus as of the date hereof, and Prometheus
disclaims any obligation to update any forward-looking statements to reflect any
change in its expectations or any change in events, conditions, or circumstances
on which any such statement is based, except as required by law. For additional
information regarding forward-looking statements, please refer to discussions
under the captions "Risk Factors" and "Management's Discussion and Analysis of
Financial Condition and Results of Operation" and elsewhere in our most recent
Annual Report on Form 10-K and in our other reports filed with the
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The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: (i) the proposed Merger may not be completed in a timely manner or at all, including the risk that any required regulatory approvals are not obtained, are delayed or are subject to unanticipated conditions that could adversely affect Prometheus or the expected benefits of the proposed Merger or that the approval of Prometheus' stockholders is not obtained; (ii) the failure to realize the anticipated benefits of the proposed Merger; (iii) the possibility that competing offers or acquisition proposals for Prometheus will be made; (iv) the possibility that any or all of the various conditions to the consummation of the proposed Merger may not be satisfied or waived, including the failure to receive any required regulatory approvals from any applicable governmental entities (or any conditions, limitations or restrictions placed on such approvals); (v) the occurrence of any event, change or other circumstance that could give rise to the termination of the proposed Merger, including in circumstances which would require Prometheus to pay a termination fee or other expenses; and (vi) the effect of the announcement or pendency of the proposed Merger on Prometheus' ability to retain and hire key personnel, or its operating results and business generally.
Additional Information
This Current Report may be deemed solicitation material in respect of the
proposed acquisition of the Company. A special stockholder meeting will be
announced soon to obtain stockholder approval in connection with the proposed
Merger between the Company and Parent. The Company expects to file with the
Participants in the Solicitation
The Company and its directors, executive officers and certain other members of
management and employees may be deemed to be participants in soliciting proxies
from its stockholders in connection with the proposed Merger. Information
regarding the persons who may, under the rules of the
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