The complaints seek, among other things, (i) injunctive relief enjoining the Merger, unless and until the defendants issue additional disclosures, (ii) rescission of the Merger Agreement to the extent already implemented or rescissory damages, and (iii) recovery of an unspecified amount of damages, costs and disbursements. The Company believes the claims asserted in the Lawsuits are without merit and intends to vigorously defend against them. Additional complaints arising out of the proposed transaction may be filed in the future. Absent new or different allegations that are material or a disclosure obligation under U.S. federal securities laws, the Company will not necessarily disclose such additional complaints.
While the Company believes that the disclosure set forth in the Proxy Statement complies fully with applicable law, in order to moot plaintiffs’ disclosure claims, avoid nuisance, possible expense and delay, and provide additional information to our stockholders, the Company has determined to voluntarily supplement the Proxy Statement with the supplemental disclosure set forth below (the “Supplemental Disclosure”). Nothing in the Supplemental Disclosure shall be deemed an admission of the legal necessity or materiality under applicable law of any of the disclosure set forth herein or in the Proxy Statement. To the contrary, the Company specifically denies all allegations in the Lawsuits that any additional disclosure was or is required.
Supplemental Disclosure to Proxy Statement
The following information should be read in conjunction with the Proxy Statement, which should be read in its entirety. All page references are to pages in the Proxy Statement, and terms used below, unless otherwise defined, have the meanings set forth in the Proxy Statement. Underlined text shows text being added to a reference disclosure in the Proxy Statement and a line through text shows text being deleted from a referenced disclosure in the Proxy Statement.
The Merger – Background of the Merger
The disclosure under the heading “The Merger—Background of the Merger” is hereby supplemented by adding the underlined disclosure to the fourth paragraph on page 51 of the Proxy Statement, as follows:
On February 8, 2023, representatives of Elliott contacted Mr. Dineen and on February 9, 2023, Mr. Dineen and Ms. Keefe held a telephone conversation with representatives of Elliott to discuss various matters relating to the Company. In particular, representatives of Elliott informed Mr. Dineen and Ms. Keefe that Elliott and its affiliated funds had invested in the Company via the public markets, that Elliott and its affiliates had an aggregate economic exposure to no more than 8.0% of the Company’s Class A common stock and that Elliott was interested in exploring a potential strategic transaction with the Company.
The disclosure under the heading “The Merger—Background of the Merger” is hereby supplemented by adding the underlined disclosure to the fifth paragraph on page 51 of the Proxy Statement, as follows:
Later in the day on February 9, 2023, the Board held a meeting by videoconference, with members of senior management of the Company and representatives of Latham, BofA Securities, Centerview and EY present. The Board and its advisors discussed the current status of the ongoing strategic review process. The Board and its advisors also discussed Elliott’s outreach and desire to participate in the Company’s ongoing strategic review process, and the Board’s fiduciary responsibilities in connection therewith and potential implications of not allowing Elliott to participate in the process, including Elliott’s stated potential to nominate directors at the Company’s 2023 annual meeting of stockholders or advocate for other corporate changes. Following discussion, the Board authorized the Company and its representatives to negotiate a confidentiality agreement with Elliott and invite Elliott to participate in the ongoing process alongside other potential counterparties.
The disclosure under the heading “The Merger—Background of the Merger” is hereby supplemented by adding the underlined disclosure as a new third paragraph on page 52 of the Proxy Statement, as follows:
On February 17, 2023, the Committee held a meeting by videoconference, with members of senior management of the Company and representatives of Latham, E&Y, BofA Securities and Centerview present, to discuss the ongoing negotiations of a confidentiality agreement with Elliott and review the proposed terms of the confidentiality agreement, including the timing implications of Elliott’s request that the Company agree not to hold its annual meeting prior to June 26, 2023.
The disclosure under the heading “The Merger—Background of the Merger” is hereby supplemented by adding the underlined disclosure to the third paragraph on page 52 of the Proxy Statement, as follows:
On February 21, 2023, the Company entered into a customary confidentiality agreement with Elliott. The confidentiality agreement with Elliott contained a customary standstill provision that fell away upon the public announcement by the Company that it entered into the Merger Agreement, as well as an agreement with Elliott to provide Elliott advance notice of (and an opportunity to nominate directors at) the Company’s 2023 annual meeting of stockholders and an agreement by the Company not to hold its annual meeting prior to June 26, 2023. Pursuant to the confidentiality agreement, the standstill restrictions would also have fallen away 6 months after the date of the confidentiality agreement or upon the occurrence of certain other corporate events (such as a sale of the Company). The confidentiality agreement entered into between the Company and Elliott did not prohibit Elliott from making a competing non-public proposal to the Board.
The disclosure under the heading “The Merger—Background of the Merger” is hereby supplemented by adding the underlined disclosure to the fourth paragraph on page 54 of the Proxy Statement, as follows:
On March 24, 2023, Patient Square contacted BofA Securities and Centerview and requested the Company’s approval to engage with Elliott and collaborate as a single bidder, which approval was required under the applicable confidentiality agreements, based upon Patient Square’s and Elliott’s familiarity with each other and historical dialogue between the two firms related to the Contract Research Organization sector. Representatives of BofA Securities and Centerview and management of the Company discussed the benefits and disadvantages of authorizing Patient Square to partner with Elliott. In light of Patient Square’s good business relationships with Elliott, and the fact that Patient Square had joined the process later than other potential counterparties, management determined that allowing Patient Square to partner with Elliott would allow Elliott to accelerate its evaluation of the Company by leveraging Patient Square’s experience in the healthcare industry. Following discussion between management of the Company and Mr. Dineen, who was supportive of this approach, the Company approved the request on March 24, 2023.