Item 1.01. Entry into a Material Definitive Agreement
On January 18, 2022, Zogenix, Inc., a Delaware corporation (the “Company”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with UCB S.A., a société anonyme formed under the laws of Belgium (“Parent”), and Zinc Merger Sub, Inc., a Delaware corporation and indirect wholly owned subsidiary of Parent (“Merger Sub”), pursuant to which, on the terms and subject to the conditions set forth therein, Merger Sub will commence a tender offer (the “Offer”) as promptly after the date thereof as practicable, but in no event later than February 1, 2022 (unless otherwise agreed by Parent and the Company), to acquire all of the Company’s outstanding shares of common stock, par value $0.001 per share (the “Company Shares”), at a purchase price of (i) $26.00 per Company Share (the “Closing Amount”), net to the seller thereof in cash, subject to reduction for any applicable withholding taxes and without interest, plus (ii) one non-transferrable contingent value right per Company Share representing the right to receive a contingent payment of $2.00 (each, a “CVR”, and the Closing Amount plus one CVR, collectively, or any greater amount per Company Share that may be paid pursuant to the Offer, being hereinafter referred to as the “Offer Price”), net to the holder thereof in cash, subject to reduction for any applicable withholding taxes and without interest, upon the achievement of the milestone specified in, and on the other terms and subject to the other conditions set forth in, the CVR Agreement (as defined herein). Consummation of the Offer is not subject to a financing condition.
At or prior to the time at which Merger Sub accepts the Company Shares tendered in the Offer for purchase, Parent and a rights agent mutually agreeable to Parent and the Company will enter into a contingent value rights agreement (the “CVR Agreement”), a form of which is attached to the Merger Agreement, governing the terms of the CVRs. Each CVR entitles the holder thereof to receive a cash payment of $2.00, subject to reduction for any applicable withholding taxes and without interest, if, and only if, no later than December 31, 2023, the European Commission approves the therapeutic indication for seizures associated with Lennox-Gastaut syndrome for the Company’s product Fintepla as an orphan medicinal product, after the European Medicines Agency has recommended that such product (fenfluramine hydrochloride) not be removed from the European Union’s register of orphan medicinal products for the treatment of Lennox-Gastaut syndrome. The foregoing description of the CVR Agreement does not purport to be complete and is qualified in its entirety by the full text of the CVR Agreement, a copy of which is included as an exhibit to the Merger Agreement attached hereto as Exhibit 2.1 and incorporated by reference herein.
Merger Sub’s obligation to purchase the Company Shares validly tendered pursuant to the Offer is subject to the satisfaction or waiver of certain conditions set forth in the Merger Agreement, including (i) there having been validly tendered in accordance with the terms of the Offer and not validly withdrawn, as of immediately prior to the expiration of the Offer, a number of Company Shares that, together with the Company Shares then owned by Parent or Merger Sub, represents at least a majority of the Company Shares then outstanding; (ii) the accuracy of the representations and warranties of the Company contained in the Merger Agreement, subject to certain materiality qualifications; (iii) the Company’s compliance in all material respects with its covenants and agreements contained in the Merger Agreement; (iv) the expiration or termination of any waiting period (and any extension thereof) applicable to the Offer or the Merger under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the receipt of any other clearance, approval or consent applicable to Offer or the Merger (as defined below) under any applicable antitrust law; (v) the absence of a Company Material Adverse Effect (as defined in the Merger Agreement) that is continuing; and (vi) the absence of any law, regulation, order, injunction or ruling issued or enacted by any government authority of competent jurisdiction that would prohibit or make illegal the consummation of the Offer or the Merger, or that would impose certain remedies or restrictions on the ability of Parent to fully own or operate the Company, its businesses or assets.
As soon as practicable following the completion of the Offer, on the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into the Company, with the Company surviving as a wholly owned subsidiary of Parent, pursuant to Section 251(h) of the General Corporation Law of the State of Delaware (the “DGCL”) without a vote of the Company’s stockholders (the “Merger”). Immediately prior to the effective time of the Merger (the “Effective Time”), and without any action on the part of the holders of any Company Shares, each Company Share, other than Company Shares (i) owned by Parent, the Company or any of their respective wholly owned subsidiaries immediately prior to the Effective Time or (ii) owned by Company stockholders who are entitled to demand and have properly and validly demanded their appraisal rights under Delaware law, will be automatically converted into the right to receive consideration equal to the Offer Price.
In addition, effective as of the Effective Time, (i) each outstanding Company stock option with an exercise price per share less than $26.00, whether or not then exercisable or vested, will be automatically canceled and converted into the right to receive (A) $26.00 in cash (less the applicable exercise price) multiplied by the number of shares of Company Shares subject to such Company stock option plus (B) one CVR for each Company Share subject to such Company stock option, (ii) each Company stock option with an exercise price per share of at least $26.00 but less than $28.00, whether or not then exercisable or vested, will be automatically canceled and converted into the right to receive, if and when (and only if and when)
