United States securities and exchange commission logo
August 8, 2023
Austin Pollet
Partner
Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, New York 10019
Re: Pardes Biosciences,
Inc.
Schedule TO-T filed
July 28, 2023
File No. 005-93142
Dear Austin Pollet:
We have reviewed your filing and have the following comments. In
some of our
comments, we may ask you to provide us with information so we may better
understand your
disclosure.
Please respond to these comments by providing the requested
information or advise us as
soon as possible when you will respond. If you do not believe our
comments apply to your facts
and circumstances, please tell us why in your response.
After reviewing your response to these comments, we may have
additional comments.
Defined terms used herein have the same meaning as in your offer
materials.
Schedule TO-T filed July 28, 2023
General
1. Item 2(f) of the
Schedule 13E-3 incorporates by reference disclosure in the Schedule 14D-
9 and the Offer to
Purchase. However the disclosure does not appear responsive to the
requirements in Item
1002(f) of Regulation M-A, which requires disclosure of the
average purchase price
for each quarter if the filing person purchased any subject
securities during the
past two years. Please advise or revise.
2. Please revise the Offer
to Purchase to include a Special Factors section at the front of the
disclosure document
disseminated to shareholders, as required by Rule 13e-3(e)(1)(ii).
3. The June 12, 2023
presentation by SVB Securities filed as Exhibit 99.(C)(3) appears to
contain redactions on
page 2 in the footnotes. Please clarify the basis on which you have
made these redactions.
Alternatively, please refile without omitting this information.
4. The offer to purchase
does not state an estimated value for the Additional Purchase Price
Austin Pollet
FirstName LastNameAustin Pollet
Paul, Weiss, Rifkind, Wharton & Garrison LLP
Comapany
August NamePaul, Weiss, Rifkind, Wharton & Garrison LLP
8, 2023
August
Page 2 8, 2023 Page 2
FirstName LastName
but instead includes a maximum value of $0.17. In addition, no value
is ascribed to the
CVR. However, the analysis undertaken by Leerink Partners in its
presentation dated
June 16, 2023 (on page 6, footnote 3) attributes an additional value
of $0.10 per share
beyond the $2.02 offered. Please revise the offer materials
accordingly.
5. While you have checked the box on the cover page of the Schedule TO-T
to indicate that
the transaction is subject to Rule 13e-3, the filing itself must be
"tagged" upon EDGAR
filing as both a Schedule TO-T and a Schedule 13E-3 in order to
properly reflect that it is
intended to satisfy the filing requirements of both Schedules. Please
revise.
6. Based on discussions with counsel, it is unclear whether Foresite or
its affiliates engaged a
financial advisor to assist in connection with this transaction.
Please advise and if so,
provide the disclosure required by Item 9 of Schedule 13E-3.
7. Based on the nature of these comments, we believe it is necessary to
disseminate a revised
offer document with the new information requested. Please confirm your
understanding.
Summary Term Sheet, page 6
8. We note your disclosure that the consideration in the Offer includes
an additional amount
of cash of up to $0.17 per Share. Depending on when the amount of
the additional
consideration will be known, we believe this offer structure may be
problematic (see
comments that follow). To the extent that it is maintained, please
revise to explain why the
maximum amount payable would be $0.17 pursuant to the formula to be
used to calculate
the amount of the additional portion of the offer consideration.
9. Refer to the last comment above. Clarify when the Additional Purchase
Price will be set.
Disclosure states that the Cash Determination Time will be set
"immediately prior to
the Expiration Date." However, Item 1004(a)(1)(ii) requires the amount
of the offer
consideration to be specified and Rule 14e-1(b) requires the offer
period to remain open
for at least ten business days from the date the offer price changes.
Please advise when (in
relation to the end of the offer period) the Additional Purchase Price
will be determined
and communicated to shareholders.
10. Refer to the last two comments above. We believe the way the offer
consideration is
described throughout the offer to purchase is likely to mislead
shareholders. See for
example, the following disclosure: "Purchaser is offering to pay a
Base Price Per Share
equal to $2.02 per Share, with an Additional Price Per Share of up to
$0.17 per Share." It
is not clear, however, whether any additional consideration will be
payable, and even if
so, it may be less than $0.17 per share. If in fact no additional
amount may be
forthcoming, the offer materials (as supplemented to address comments)
should be revised
to clarify that the offer price is $2.02 per share with the
possibility of additional
consideration from $0 to $0.17 per share through the Additional
Purchase Price, with no
assurance that any additional amount will be paid. Shareholders should
be reminded
wherever the Additional Purchase Price (and the CVR) is referenced,
that they should
base their tender decision on the amount of the Base Price Per Share,
which is below
Austin Pollet
FirstName LastNameAustin Pollet
Paul, Weiss, Rifkind, Wharton & Garrison LLP
Comapany
August NamePaul, Weiss, Rifkind, Wharton & Garrison LLP
8, 2023
August
Page 3 8, 2023 Page 3
FirstName LastName
recent trading prices. In addition, the term "Additional Purchase
Price" itself should be
revised to something that more accurately reflects its conditional
nature, such as "Possible
Additional Purchase Price."
11. We note that one of the Offer conditions is that the Closing Net Cash
be at least
$125,000,000. Revise to explain what minimum per share amount this
would yield as an
Additional Purchase Price (clarifying additional elements to such
calculation, if any), with
the caveat that the bidders may waive this Offer condition.
12. We note your disclosure that the Additional Price Per Share, if any,
will be determined
based on the formula included on page 7, which formula
cross-references defined terms in
the Merger Agreement. The summary term sheet must be written in plain
English and
must provide security holders with sufficient information to
understand the essential
features and significance of the proposed transaction. Refer to Item
1001 of Regulation
M-A. Please revise to provide illustrative disclosure, in plain
English, showing how the
Additional Price Per Share will be calculated.
13. We note your disclosure on page 8 that there is no reliable
estimate of the amount of Net
Proceeds, if any, that can be expected from Dispositions, if any.
However, you disclose
on pages 9 and 54 that Pardes estimate as to the amount that is
expected to be payable
under the CVRs is $0.00. Please revise to address this apparent
discrepancy, as well as
the assumptions underlying your estimate.
14. Revise the Summary Term Sheet to describe that this is a tender offer
by affiliated parties
and to describe the nature of the affiliation between the bidders and
Pardes, the potential
conflict that exists as a result, including the fact that Mr.
Tananbaum is a member of the
board of directors of Pardes and the CEO and founder of Foresite.
Certain Information Concerning Parent and Purchaser, page 36
15. Please state the aggregate number and percentage of subject securities
that are beneficially
owned by each person specified in Instruction C to Schedule 13E-3 for
each filing person
of the Schedule 13E-3, such as Dennis Ryan and Thomas Wiggins. See
Item 1008(a) of
Regulation M-A.
16. Please revise to provide the information required by Item 1003(c)(1)
for all bidders, such
as the principal business of Parent.
Background of the Offer; Contacts with Pardes, page 40
17. Item 9 of Schedule 13E-3 and Item 1015(b)(6) of Regulation M-A
requires a filing person
to summarize in considerable detail any reports, whether oral or
written, received from a
third party and materially related to this transaction. This section
references presentations
by Leerink Partners to the Pardes Board during the course of entering
into this transaction
and considering alternatives for Pardes. See, for example, the
reference to the meeting on
April 13, 2023. For this and any other meeting between Pardes and its
financial advisors,
summarize the substance of the presentations and file any written
materials provided as
Austin Pollet
FirstName LastNameAustin Pollet
Paul, Weiss, Rifkind, Wharton & Garrison LLP
Comapany
August NamePaul, Weiss, Rifkind, Wharton & Garrison LLP
8, 2023
August
Page 4 8, 2023 Page 4
FirstName LastName
exhibits to the Schedule 13E-3. We note that the only materials
currently filed are dated
July 16, 2023 and June 12, 2023. As noted above, these materials and
any others filed as a
result of this comment must be summarized in considerable detail in
the disclosure
document.
18. While we understand that this disclosure is provided by filing persons
other than Pardes, it
is also provided by affiliated parties who have some insight into the
background leading
up to the merger agreement and decision to commence this Offer. As
such, please
generally note the auction process that Foresite participated in or
refer shareholders to a
more complete discussion in the Schedule 14D-9.
Purpose of the Offer and Plans for Pardes; Summary of the Merger Agreement and
Certain Other
Agreements, page 43
19. Revise to state why the Purchaser Parties are seeking to purchase
Pardes, and why they
are trying to do so now. See Item 1013(c) of Regulation M-A. Rather
than stating that
they are doing so to acquire control of, and the entire equity
interest in, Pardes, explain
why they wish to do so, and why now.
20. Please disclose the effect of the transaction on the Purchaser Parties
interest in the net
book value and net earnings of Pardes in both dollar amounts and
percentages. Refer to
Exchange Act Rule 13e-3(e), Item 7 of Schedule 13E-3, Item 1013(d) of
Regulation M-A
and Instruction 3 thereto.
Position of Parent And Purchaser Regarding Fairness of the Offer and the
Merger, page 62
21. The disclosure here indicates the Purchaser Parties believe the "Offer
Price" to be received
by unaffiliated shareholders is fair. The term "Offer Price" is
defined earlier in the offer
materials to include the Base Price of $2.02 per share, the Additional
Purchase Price of up
to $0.17 per share, and the CVR. However, the CVR and the Additional
Purchase Price
may yield no additional value for shareholders. This section should be
generally revised
to address the fairness of the Base Price on a stand-alone basis,
since it is the only
payment tendering shareholders are guaranteed to receive if the Offer
is consummated.
The filers may additionally address fairness based on the CVR and
Additional Purchase
Price, but in each case, the disclosure must be clear as to what value
is being attributed to
each potential additional payment, along with how the filers
considered that neither may
result in additional payments.
22. The factors listed in Instruction 2 to Item 1014 of Regulation M-A are
generally relevant
to each filing person s fairness determination and should be
discussed in reasonable detail.
See Question Nos. 20 and 21 of Exchange Act Release No. 34-17719
(Apr. 13, 1981).
Please revise this section to include the factors described in
Instruction 2 to Item 1014 or
explain why such factors were not deemed material or relevant to the
Purchaser Parties
fairness determination.
23. Revise to include the filing persons' position on the procedural
fairness of the transaction
Austin Pollet
Paul, Weiss, Rifkind, Wharton & Garrison LLP
August 8, 2023
Page 5
and to describe their supporting analysis. If they believe the Offer
is procedurally fair,
explain why, addressing each of the procedural safeguards in Item
1014(c), (d) and (e).
24. See our comments above. The first bullet point in this section states
that the Purchaser
Parties believe the Offer is fair based in part on the fact that the
Offer Price represents a
premium of approximately 9.2% over the closing price of the shares on
July 14, 2023.
The term "Offer Price" is defined to include the Cash Price, the
Additional Price Per Share
and the CVR. Please revise to clarify what value the Purchaser Parties
attributed to the
CVR and the Additional Price Per Share in assessing fairness.
25. Expand to discuss the negative factors considered by the Purchaser
Parties that weighed
against fairness, and how they were considered.
Conditions of the Offer, page 56
26. We note the following language in the last paragraph of this section:
"The foregoing
conditions are in addition to, and not a limitation of, the right of
Parent and Purchaser to
extend, terminate or modify the Offer pursuant to the terms and
conditions of the Merger
Agreement." All offer conditions should be clearly described in this
section. Please
revise.
Appraisal Rights, page 59
27. We note the following statement in this section: "The foregoing
summary of appraisal
rights under the DGCL does not purport to be a full statement of the
procedures to be
followed by persons desiring to exercise any appraisal rights under
Delaware law."
Revise to fully describe specifically what shareholders must do to
perfect their appraisal
rights.
We remind you that the filing persons are responsible for the accuracy
and adequacy of
their disclosures, notwithstanding any review, comments, action or absence of
action by the staff.
Please direct any questions to Christina Chalk at (202) 551-3263 or to
Blake Grady at
(202) 551-8573.
FirstName LastNameAustin Pollet Sincerely,
Comapany NamePaul, Weiss, Rifkind, Wharton & Garrison LLP
Division of Corporation
Finance
August 8, 2023 Page 5 Office of Mergers &
Acquisitions
FirstName LastName