SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) December 14, 1998
PHARMACEUTICAL MARKETING SERVICES INC.
(Exact Name of Registrant as Specified in Charter)
Delaware 01-9723 51-0335521
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
Suite 912, 45 Rockefeller Plaza, New York, NY 10111
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (212)841-0610
(Former Name or Former Address, if Changed Since Last Report)
Item 5. Other Events.
On December 14, 1998, the registrant, Pharmaceutical Marketing
Services Inc. (the "Company"), entered into a Merger Agreement (the "Merger
Agreement") among Quintiles Transnational Corp. ("Quintiles"), QTRN Acquisition
Corp., a wholly-owned subsidiary of Quintiles ("Acquisition Sub"), and the
Company. The Merger Agreement provides for the Company to merge with and into
Acquisition Sub and become a wholly-owned subsidiary of Quintiles (the
"Merger"), subject to satisfaction of the terms and conditions of the Merger
Agreement. Pursuant to the Merger Agreement, stockholders of the Company will
receive shares of Quintiles' common stock, $.01 par value ("Quintiles Common
Stock") in exchange for their shares of common stock, $.01 par value, of the
Company ("Company Common Stock") valued at $15.40 per share of Company Common
Stock.
Each stockholder of the Company will have the option of either (i)
receiving at the effective time of the Merger (the "Effective Time") all the
shares of Quintiles Common Stock to which he or she is entitled or (ii) (a)
receiving at the Effective Time, one-half the shares of Quintiles Common Stock
and (b) deferring receipt of the other half of the shares of Quintiles Common
Stock to which he or she is entitled for up to 75 days following the Effective
Time and, if such holder defers such receipt for the full 75 days, receiving, in
addition, a cash payment in the amount, if any, by which the value of the
Quintiles Common Stock received at the Effective Time exceeds the value of the
deferred Quintiles Common Stock as described below. The right to receive a cash
payment, if any, is not transferable. In addition, the right to receive a cash
payment, if any, will terminate if at any time during the 20 trading days
preceding the 75th day following the Effective Time either (i) a stockholder's
"short position" in Quintiles Common Stock (determined in accordance with Rule
14e-4(a) of the Securities Exchange Act of 1934, as amended, but without taking
into account the right to receive a cash payment) exceeds such stockholder's
"long position" in Quintiles Common Stock (determined in accordance with such
rule) or (ii) a stockholder takes any action to manipulate the price of
Quintiles Common Stock which would violate Section 9 of the Exchange Act.
The exchange ratio applicable to Quintiles Common Stock at the
Effective Time will be determined by reference to the average of the closing
prices per share of Quintiles Common Stock on the Nasdaq National Market for the
aggregate of 10 trading days immediately preceding the second trading day prior
to the Effective Time (the "Average Trading Price"). The value of Quintiles
Common Stock on the 75th day following the Effective Time will be determined by
reference to the average of the closing prices per share of Quintiles Common
Stock on the Nasdaq
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National Market for 10 trading days selected at random by the Exchange Agent on
such 75th day from the 20 trading days immediately preceding such 75th day.
The Company may terminate the Merger Agreement if the Average Trading
Price is more than $62.325 provided, however, that if the Company desires to
terminate the Merger Agreement in such event, Quintiles has the option of
consummating the Merger using an exchange ratio of approximately .247 shares of
Quintiles Common Stock for each share of Company Common Stock. Quintiles may
terminate the Merger Agreement if the Average Trading Price is less than $41.55,
provided, however, that if Quintiles desires to terminate the Merger Agreement
in such event, the Company has the option of consummating the Merger using an
exchange ratio of approximately .371 shares of Quintiles Common Stock for each
share of Company Common Stock.
Concurrently with the execution of the Merger Agreement, the Company
also entered into a Stock Option Agreement (the "Stock Option Agreement") with
Quintiles pursuant to which the Company granted to Quintiles an option to
purchase up to an aggregate 19.9% of the shares of Company Common Stock at
$12.00 per share. The option is exercisable in the event the Merger Agreement is
terminated under circumstances in which Quintiles becomes entitled to receive a
termination fee from the Company and in the event another party proposes to
acquire the Company. The maximum amount of compensation the Company is required
to pay Quintiles under the Stock Option Agreement together with any termination
fees and expense reimbursement is $9 million.
In connection with its approval of the Merger and the Merger
Agreement, the Board of Directors of the Company amended the Rights Agreement of
the Company to the effect that none of the Merger, the Merger Agreement or the
Stock Option Agreement will cause the Rights issued under the Rights Agreement
to become exercisable.
The Merger is subject to the approval of the stockholders of the
Company, and to certain other conditions. The Merger Agreement (without
schedules or exhibits) is attached hereto as Exhibit 2.1.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
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Number Description
2.1 Merger Agreement, dated
as of December 14,1998,
among Quintiles
Transnational Corp., QTRN
Acquisition Corp. and
Pharmaceutical Marketing
Services Inc.
2.2 Contingent Value Payment
Terms and Conditions
2.3 Stock Option Agreement,
dated as of December 14,
1998, by and between
Pharmaceutical Marketing
Services Inc. and
Quintiles Transnational
Corp.
99.1 Press Release dated
December 15, 1998.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
PHARMACEUTICAL MARKETING SERVICES INC.
By: /s/ Warren J. Hauser
Name: Warren J. Hauser
Title: Vice President, Secretary
Date: December 15, 1998
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INDEX TO EXHIBITS
Exhibit Description
2.1 Merger Agreement, dated
as of December 14, 1998
among Quintiles
Transnational Corp., QTRN
Acquisition Corp. and
Pharmaceutical Marketing
Services Inc.
2.2 Contingent Value Payment
Terms and Conditions
2.3 Stock Option Agreement,
dated as of December 14,
1998, by and between
Pharmaceutical Marketing
Services Inc. and
Quintiles Transnational
Corp.
99.1 Press Release dated
December 15, 1998.