FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13A-16 OR 15D-16 OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE 2ND OF AUGUST 2006
MSYSTEMS LTD.
(Translation of registrant's name in English)
7 ATIR YEDA ST.
KFAR SABA 44425, ISRAEL
(Address of principal executive offices)
Indicate by check mark whether registrant files or will file annual reports
under cover Form 20-F or Form 40-F:
Form 20-F X Form 40-F
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Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(1): ____
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(7): ____
Indicate by check mark whether registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:
Yes No X
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If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with rule 12g3-2(b):
82-_________________.
THIS FORM 6-K IS INCORPORATED BY REFERENCE INTO OUR REGISTRATION STATEMENTS ON
FORM S-8 AND FORM F-3 FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
(REGISTRATION NO. 333-127467 AND REGISTRATION NO. 333-126774, RESPECTIVELY).
On July 30, 2006, msystems Ltd. ("msystems") entered into an Agreement
and Plan of Merger with SanDisk Corporation ("SanDisk") and Project Desert Ltd.,
a wholly-owned subsidiary of SanDisk ("MergerSub"), pursuant to which, on the
terms and subject to the conditions set forth in the agreement, (i) MergerSub
would merge with and into msystems and, as a result, msystems would become a
wholly-owned subsidiary of SanDisk, and (ii) at the effective time of the
merger, each ordinary share of msystems outstanding will be converted into the
right to receive 0.76368 of a share of SanDisk common stock.
Consummation of the proposed merger is subject to closing conditions,
including (among others) receipt of a vote in favor of the merger from the
requisite percentage of msystems' security holders, receipt of approval for the
merger from an Israeli court, receipt of requisite regulatory approvals and the
expiration of requisite waiting periods under antitrust laws.
In the merger agreement, msystems agreed that it would not (i) solicit
proposals relating to alternative business combination transactions or (ii)
subject to certain exceptions, enter into negotiations or an agreement
concerning, or furnish information to facilitate, any proposals for alternative
business combination transactions.
Each party has certain rights to terminate the merger agreement. If the
merger agreement is terminated under certain circumstances (including if it is
terminated by msystems in order to accept a superior acquisition proposal),
msystems has agreed that it will pay SanDisk a termination fee of $74 million.
If the merger agreement is terminated under certain circumstances as a result of
not receiving antitrust approvals, SanDisk has agreed that msystems will have
the option of requiring SanDisk to make an investment in msystems by purchasing
from msystems a number of msystems ordinary shares equal to up to 9.9% of the
number of ordinary shares outstanding on the date of termination of the merger
agreement, at a per share purchase price equal to the greater of (A) $38.15 and
(B) the average closing price of msystems ordinary shares for the five
consecutive trading days ending on the date of such termination.
Concurrently with the execution of the merger agreement, all of the
directors and certain executive officers of msystems entered into voting
undertakings with SanDisk, pursuant to which such individuals committed to vote
their msystems shares in favor of the merger. Pursuant to the voting
undertakings, these individuals also agreed that if the merger agreement is
terminated under certain circumstances and such individuals subsequently receive
consideration for their msystems shares in an alternative business combination
transaction, then those individuals will pay to SanDisk 50% of the excess, if
any, of the value of the consideration they received in such alternative
business combination transaction over the value of the SanDisk shares that they
would have received in the proposed merger (with the SanDisk shares being valued
as of the date the merger agreement was terminated).
Copies of the merger agreement and of the form of voting undertaking
are attached as exhibits hereto. The foregoing description of such agreements
does not purport to be complete and is qualified in its entirety by reference to
the full text of the agreements. However, readers are cautioned that the copy of
the merger agreement included with this document is not intended to provide
security holders with information concerning the condition (financial or
otherwise) of any of the parties to the merger agreement. Specifically, although
the merger agreement contains various representations and warranties of the
parties, those representations and warranties were negotiated between the
parties with the principal purpose of providing the conditions under which they
would remain obligated to proceed with the merger in the event circumstances
differ from those stated in the representations and warranties (subject to the
disclosures and other qualifications that have been negotiated in the merger
agreement). Accordingly, readers should not look to or rely on such
representations and warranties for information about the parties to the merger
agreement.
msystems expects to disseminate to its security holders a proxy
statement in connection with the meeting at which msystems' security holders
will be asked to approve the proposed merger. msystems' security holders are
urged to read the proxy statement, when it becomes available, because it will
contain important information. msystems' security holders will also be able to
obtain a free copy of the proxy statement (when it is furnished to the SEC and
becomes available) at the SEC's website at http://www.sec.gov. Such proxy
statement (when it becomes available) may also be obtained by msystems' security
holders for free from msystems' investor relations, 7 Atir Yeda, Kfar Saba 44425
Israel (+972-9-764-5000). msystems and its directors and executive officers may
be soliciting proxies from msystems' security holders in connection with the
proposed merger. A description of certain interests that msystems' directors and
executive officers may have in the merger will be available in the proxy
statement.
Exhibits:
1. Agreement and Plan of Merger, dated as of July 30, 2006, by and
among msystems Ltd., SanDisk Corporation and Project Desert Ltd.
2. Form of Voting Undertaking
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.
MSYSTEMS LTD.
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(Registrant)
Date: August 2, 2006 By: /s/ Donna Gershowitz
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Donna Gershowitz
VP, General Counsel