Exhibit 99.(A)(1)
U.S. Offer to Purchase for Cash
All Outstanding Shares of Common Stock and
American Depositary Shares
of
LABORATORIO CHILE S.A.
at
$1.25 Net per Share of Common Stock and
$25.00 Net per American Depositary Share
(each American Depositary Share representing 20 Shares of Common Stock)
by
IVAX HOLDINGS C.I.
a wholly-owned subsidiary of
IVAX CORPORATION
THE U.S. OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 NOON, NEW YORK CITY
TIME, ON FRIDAY, JUNE 29, 2001, UNLESS THE U.S. OFFER IS EXTENDED.
IVAX Corporation, a Florida corporation ("IVAX"), through simultaneous
offers in the United States and Chile, is seeking to acquire for cash all of
the outstanding shares of common stock, no par value (the "Shares"), of
Laboratorio Chile S.A. (the "Company"), including Shares represented by
American Depositary Shares (the "ADSs"). In the United States, IVAX Holdings
C.I., a Cayman Islands company (the "Purchaser"), which is a wholly-owned
subsidiary of IVAX, is seeking to acquire all outstanding Shares held by U.S.
holders (as defined in Rule 14d-1(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")), and all outstanding ADSs (the "U.S. Offer").
In Chile, Inversiones Glaciar I Limitada ("Inversiones Glaciar"), a wholly-
owned subsidiary of IVAX, is seeking to acquire all Shares, including Shares
held by U.S. holders (the "Chilean Offer" and together with the U.S. Offer,
the "Offers"). Non-U.S. holders of Shares must tender their shares into the
Chilean Offer. U.S. holders of Shares may tender their Shares into either the
U.S. Offer or the Chilean Offer, but not into both Offers. The Chilean Offer
will be made on substantially the same terms as the U.S. Offer. In the event
that the price per Share to be paid in the Chilean Offer is increased, the
Purchaser will make a corresponding increase to the price paid per Share and
ADS in the U.S. Offer.
The Offers will not proceed unless the Company's shareholders (the
"Shareholders") approve the bylaw amendments described below (the "Bylaw
Amendments") by the affirmative vote of holders of at least 75% of the Shares,
including Shares represented by ADSs, at an extraordinary meeting of the
Shareholders called for such purpose (the "Shareholders Meeting"). These
amendments will, among other things, eliminate the restriction currently
contained in the Company's Bylaws that limits to 49.9% the percentage of the
Shares that may be owned and voted by one Shareholder, directly or through
related persons, and eliminate the obligation of the Company to comply with
the provisions of Chilean Decree Law 3,500. The Offers are subject to
additional material conditions, including that at least 67% of the Shares
(including Shares represented by ADSs) have been tendered into the Offers at
the time votes are cast at the Shareholders Meeting. Please see Section 15.
IVAX entered into an agreement, dated as of May 18, 2001 (the "Agreement
to Tender"), with Comercial e Inversiones Portfolio Limitada and Inversiones
Portfolio S.A. (collectively, the "Principal Shareholders"), which
collectively hold approximately 28% of the Shares. Pursuant to the Agreement
to Tender, the Principal Shareholders have agreed to vote all of their Shares
in favor of the Bylaw Amendments and to tender all of their Shares into the
Chilean Offer and their ADSs into the U.S. Offer, subject to certain
conditions.
As of the date hereof, the Company's Board of Directors has not reviewed
the U.S. Offer and has not taken a position with respect to the U.S. Offer.
Pursuant to Rule 14e-2 under the Exchange Act, the Company, within ten
business days of the date of this U.S. Offer to Purchase, is required to
provide the Shareholders with a statement of its position with respect to the
U.S. Offer.
To assist you in connection with the U.S. Offer, please contact D.F. King
& Co., Inc. ("D.F. King" or the "Information Agent"), or Merrill Lynch,
Pierce, Fenner & Smith Incorporated and UBS Warburg LLC ("Merrill Lynch & Co."
and "UBS Warburg" or the "Dealer Managers") at their respective addresses and
telephone numbers set forth on the back cover of this U.S. Offer to Purchase.
Additional copies of this U.S. Offer to Purchase, Form of Acceptance, ADS
Letter of Transmittal and ADS Notice of Guaranteed Delivery also may be
obtained from the Information Agent, the Dealer Managers, brokers, dealers,
commercial banks or trust companies.
None of the United States Securities and Exchange Commission (the
"Commission"), the state securities commissions, the Superintendencia de
Valores y Seguros (the "Chilean Securities Commission" or "SVS"), or the
securities regulatory authority of any other jurisdiction has passed upon the
fairness or merits of the transaction nor upon the accuracy or adequacy of the
information contained in the U.S. Offer to Purchase. Any representation to the
contrary is unlawful.
The Dealer Managers for the U.S. Offer are:
Merrill Lynch & Co. UBS Warburg LLC
May 31, 2001
IMPORTANT INFORMATION
Tenders by Holders of Shares. Any U.S. holder of Shares of the Company
desiring to tender all or any portion of the Shares owned by such holder in
the U.S. Offer should either (a) complete and sign the Form of Acceptance (or
a copy thereof) in accordance with the instructions in the Form of Acceptance
and mail or deliver it together with the Titulo(s) (certificate(s) of title)
and a certificate from the share department of the Company or the Deposito
Central de Valores (""DCV''), as the case may be, evidencing rights to such
tendered Shares free and clear of liens, pledges and encumbrances and all
other required documents to The Bank of New York, as receiving agent in the
U.S. Offer (the "Receiving Agent"), or tender such Shares pursuant to the
procedures for book-entry transfer set forth in Section 3, or (b) request his
or her broker, dealer, commercial bank, trust company or other nominee to
effect the transaction for him or her. A holder of Shares having Shares
registered in the name of a broker, dealer, commercial bank, trust company or
other nominee must contact such person if he or she desires to tender such
Shares.
Tenders by Holders of ADSs. Any holder of ADSs desiring to tender all or
any portion of the ADSs owned by such holder should either (a) complete and
sign the ADS Letter of Transmittal or a copy thereof in accordance with the
instructions contained in the ADS Letter of Transmittal and mail or deliver
the ADS Letter of Transmittal together with the American Depositary Receipts
(the "ADRs") evidencing tendered ADSs and all other required documents to the
Receiving Agent or tender such ADSs pursuant to the procedures for book-entry
transfer set forth in Section 4, or (b) request his or her broker, dealer,
commercial bank, trust company or other nominee to effect the transaction for
him or her. A holder having ADSs registered in the name of a broker, dealer,
commercial bank, trust company or other nominee must contact such person if he
or she desires to tender such ADSs. Any holder of ADSs who desires to tender
ADSs and whose ADRs evidencing such ADSs are not immediately available and
cannot deliver such ADRs and all other required documents to the Receiving
Agent by the expiration of the U.S. Offer or who cannot comply with the
procedures for book-entry transfer on a timely basis must tender such ADSs
pursuant to the guaranteed delivery procedure set forth in Section 4.
Settlement of U.S. Offer Price. The purchase price for the ADSs accepted
for payment pursuant to the U.S. Offer will be paid in U.S. dollars. The
purchase price for the Shares accepted for payment pursuant to the U.S. Offer
will be paid in Chilean pesos, calculated at the "dolar observado" or
"Observed Exchange Rate" for the Expiration Date. The "dolar observado" or
"Observed Exchange Rate" for any date is the average exchange rate at which
commercial banks conducted authorized transactions for such date in Chile as
determined by the Central Bank of Chile and published in the Official Gazette
of Chile on the subsequent business day. All tendering holders will bear
exchange rate risks and costs if they wish to convert the currency received
into another currency. In addition, the right of a holder of Shares to convert
Chilean pesos received upon the sale of its Shares pursuant to the U.S. Offer
into another currency and to expatriate these proceeds to a country other than
Chile may be affected by the terms of the foreign investment contract pursuant
to which such holder acquired its Shares. See Section 2.
All references to "U.S. dollars," "$" and "US$" are to the United States
dollar and all references to "Chilean pesos," "pesos," and "Ch$" shall mean
the currency which is presently legal tender in the Republic of Chile.
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TABLE OF CONTENTS
Page
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SUMMARY TERM SHEET....................................................... 1
INTRODUCTION............................................................. 6
RELIEF GRANTED BY THE COMMISSION......................................... 7
CONSENT TO BYLAW AMENDMENTS.............................................. 7
THE U.S. OFFER........................................................... 10
1. Terms of the U.S. Offer; Expiration Date.......................... 10
2. Acceptance for Payment............................................ 11
3. Procedure for Accepting the U.S. Offer -- Holders of Shares....... 12
4. Procedure for Accepting the U.S. Offer -- Holders of ADSs......... 14
5. Withdrawal Rights................................................. 16
6. Certain Tax Considerations........................................ 17
7. Price Range of Shares and ADSs; Dividends......................... 19
8. Certain Information Concerning the Company........................ 21
9. Certain Information Concerning the Purchaser and IVAX............. 23
10. Source and Amount of Funds....................................... 27
11. Background of the Offers; Past Contacts, Transactions or
Negotiations with the Company..................................... 28
12. Purpose of the Offers; Plans for the Company; Other Agreements... 28
13. Effect of the Offers on the Market for the Shares and ADSs;
Registration of Shares under the Exchange Act; Margin
Regulations...................................................... 31
14. Extension of Tender Period; Termination; Amendment............... 31
15. Certain Conditions of the U.S. Offer............................. 33
16. Certain Legal Matters; Regulatory Approvals...................... 37
17. Fees and Expenses................................................ 38
18. Miscellaneous.................................................... 39
SCHEDULE I INFORMATION CONCERNING DIRECTORS AND EXECUTIVE OFFICERS OF
IVAX AND PURCHASER..................................................... SI-1
SCHEDULE II TRANSACTIONS CONCERNING ADSs AND SHARES...................... SII-1
ANNEX I.................................................................. A-1
ii
SUMMARY TERM SHEET
Purchaser is offering to purchase all of the outstanding Shares for $1.25
per Share net in cash and all of the outstanding ADSs for $25.00 per ADS net
in cash, without any interest. The following are some of the questions you, as
a holder of ADSs or as a U.S. holder of Shares, may have and answers to those
questions.
The Purchaser urges you to read carefully the remainder of this U.S.
Offer to Purchase, Form of Acceptance, ADS Letter of Transmittal and ADS
Notice of Guaranteed Delivery because the information in this summary term
sheet is not complete. Additional important information is contained in the
remainder of this U.S. Offer to Purchase and in the Form of Acceptance, ADS
Letter of Transmittal and ADS Notice of Guaranteed Delivery.
Who is offering to buy my securities?
The Purchaser is IVAX Holdings C.I., a Cayman Islands company, formed for the
purpose of making the U.S. Offer. The Purchaser is a wholly-owned subsidiary
of IVAX.
What are the classes and amounts of securities sought in the Offers?
The Purchaser is seeking to purchase all of the outstanding Shares and ADSs.
How much is the Purchaser offering to pay, what is the form of payment and
will I have to pay any fees or commissions?
The Purchaser is offering to pay $1.25 per Share and $25.00 per ADS net to
you, in cash, without any interest (such price or any higher price paid
pursuant to the Offers, the "Offer Price"). If you are the record owner of
Shares or ADSs and you tender your Shares or ADSs to the Purchaser in the U.S.
Offer, you will not have to pay brokerage fees or similar expenses. If you own
your Shares or ADSs through a broker or other nominee, and your broker tenders
your Shares or ADSs on your behalf, your broker or nominee may charge you a
fee for doing so. You should consult your broker or nominee to determine
whether any charges will apply.
Does the Purchaser have the financial resources to make payment?
IVAX and/or its affiliates will provide the Purchaser with approximately $395
million which will be used to purchase all the Shares and ADSs validly
tendered and not withdrawn in the Offers. The Offers are not conditioned upon
any financing arrangements. IVAX and/or its affiliates currently intend to
provide the necessary funds through cash on hand. As of May 15, 2001, IVAX had
approximately $868.1 million in cash and cash equivalents. See Section 10.
Is the Purchaser's financial condition relevant to my decision to tender in
the U.S. Offer?
The Purchaser does not believe that its financial condition is relevant to
your decision whether to tender Shares or ADSs and accept the U.S. Offer
because:
. only cash consideration is being offered;
. the Offers are not subject to any financing condition; and
. the Offers are being made for all the outstanding Shares and ADSs.
Why is there a separate Chilean offer?
U.S. and Chilean laws and practice relating to tender offers are different and
inconsistent in several ways. The Purchaser is making the U.S. Offer in
compliance with U.S. law and the Chilean Offer in compliance with Chilean law.
However, the Purchaser is offering the same price per Share in the U.S. Offer
and the Chilean Offer and the conditions relating to the Offers are the same.
Who can participate in the U.S. Offer?
Holders of ADSs must tender their ADSs in the U.S. Offer. U.S. holders of
Shares may tender their Shares into either the U.S. Offer or the Chilean
Offer, but cannot tender their Shares into both the U.S. Offer and the Chilean
Offer. A U.S. holder means any security holder resident in the United States.
1
Who can participate in the Chilean Offer?
Non-U.S. holders must tender their Shares into the Chilean Offer. U.S. holders
may tender their Shares into either the Chilean Offer or the U.S. Offer, but
cannot tender their Shares into both the U.S. Offer and the Chilean Offer.
What is the difference between the Chilean Offer and the U.S. Offer?
Although the terms and conditions of the U.S. Offer and the Chilean Offer are
substantially similar, because of differences in law and market practice
between the United States and Chile, the rights of tendering Shareholders
pursuant to the U.S. Offer and the Chilean Offer are not identical. The most
significant difference is that Chilean law only permits a tender offer to be
extended one time for a period of five to fifteen calendar days. Thus, the
maximum time period that a Chilean tender offer can remain open is 45 calendar
days. Under certain circumstances (such as a change in the price offered per
Share or other material change in the terms of the U.S. Offer), U.S. tender
offer regulations may require an extension of the Expiration Date of the U.S.
Offer to a date later than such 45th day. While the Purchaser presently
intends to make the offer periods for the U.S. Offer and the Chilean Offer the
same, it is possible that, due to requirements of applicable law or market
practice, holders of Shares tendering in the Chilean Offer will be paid either
before or after holders tendering in the U.S. Offer, although the price paid
per Share will be the same in both Offers.
How long do I have to decide whether to tender in the U.S. Offer?
You will have until 12:00 noon, New York City time, on Friday, June 29, 2001,
to tender your Shares or ADSs in the U.S. Offer, unless the U.S. Offer is
extended. Further, if you own ADSs and cannot deliver everything that is
required in order to make a valid tender by that time, you may be able to use
a guaranteed delivery procedure, which is described later in this U.S. Offer
to Purchase. See Sections 1 and 4.
Can the U.S. Offer be extended and under what circumstances?
The Purchaser expressly reserves the right, in its sole discretion but subject
to applicable law, to extend the period of time during which the U.S. Offer
remains open.
The Purchaser may also elect to provide a "subsequent offering period" for the
U.S. Offer. A subsequent offering period, if one is included, will be an
additional period of time beginning after the Purchaser has purchased Shares
tendered during the U.S. Offer, during which Shareholders may tender, but not
withdraw, their Shares and ADSs and receive the offer consideration. The
Purchaser does not currently intend to include a subsequent offering period,
although it reserves the right to do so. See Section 1.
How will I be notified if the U.S. Offer is extended?
If the Purchaser extends the U.S. Offer, it will inform the Receiving Agent
and the Information Agent of that fact, and will make a public announcement of
the extension, not later than 9:00 a.m., New York City time, on the next
business day after the day on which the U.S. Offer was scheduled to expire.
See Section 1.
What are the most significant conditions to the U.S. Offer?
The U.S. Offer is subject to the following conditions:
. The Bylaw Amendments are approved by the affirmative vote of at least 75% of
holders of the outstanding Shares (including Shares represented by ADSs) at
the Shareholders Meeting, legalized and effective under Chilean law (the
"Bylaw Amendments Condition");
. At least 67% of the Shares (including Shares represented by ADSs) shall have
been tendered into the Offers at the time votes are cast at the Shareholders
Meeting to approve the Bylaw Amendments (the "Minimum Condition");
. There shall not have been a breach of Section 2.7 of the Agreement to Tender
and, as a result of the information provided pursuant to Section 2.7, IVAX
shall not have become aware of any facts or circumstances that indicate (i)
that the Company's filings with the Commission contained, at the time of
their respective filing, untrue statements of material facts or omitted to
state material facts necessary to make the
2
statements made therein, in light of the circumstances in which they were
made, not misleading and such untrue statements or omissions would
reasonably be expected to cause a material adverse effect on the condition
(financial or otherwise), business, properties, assets, liabilities or
results of operation of the Company and its subsidiaries, taken as a whole,
(ii) that any event or development shall have occurred which would
reasonably be expected to cause a material adverse effect on the condition
(financial or otherwise), business, properties, assets, liabilities or
results of operation of the Company and its subsidiaries, taken as a whole
from that reflected in the Company's Commission filings or (iii) that the
Company shall have changed its business or accounting practices from those
in place on December 31, 1999 such that the Company's publicly reported
financial statements as of and for the twelve month period ended December
31, 2000 or as of and for the three month period ended March 31, 2001 were
materially misleading; and
. The other material conditions, including conditions relating to the
operation of the Company's business, more fully described in Section 15.
Pursuant to the Agreement to Tender, IVAX has agreed with the Principal
Shareholders to waive certain conditions, including the Minimum Condition, if
at the time of the Shareholders Meeting, the Minimum Condition has been
satisfied. If IVAX waives such conditions, IVAX will make an announcement to
that effect and disseminate the information concerning the waiver no later
than five business days before the Expiration Date. If IVAX does not waive
these conditions prior to the Shareholders Meeting, then the Principal
Shareholders will not be required to vote in favor of the Bylaw Amendments.
The affirmative vote of the Principal Shareholders in favor of the Bylaw
Amendments is required for the Bylaw Amendments to be approved. These
conditions to the U.S. Offer are discussed in Section 15.
As a result of the foregoing, U.S. holders of Shares and holders of ADSs who
wish to tender into the U.S. Offer and receive the Offer Price should tender
their Shares or ADSs prior to the Shareholders Meeting and vote in favor of
the adoption of the Bylaw Amendments. Failure to satisfy the Minimum Condition
prior to the Shareholders Meeting may result in the Bylaw Amendments being
defeated and a termination of the Offers or may result in the Offers
continuing to be subject to certain conditions that the Purchaser would
otherwise be required to waive. See Section 15.
What are the conditions to the Chilean Offer?
The Chilean Offer is subject to the same conditions as the U.S. Offer.
When will the Shareholders Meeting be held?
The Principal Shareholders have requested, and the Company has agreed, that
the Shareholders Meeting be held on June 22, 2001. If you wish to tender into
the Offers, you should vote in favor of the Bylaw Amendments. In order to vote
Shares in favor of the Bylaw Amendments, holders of Shares must either (a)
appear in person at the Shareholders Meeting and vote their Shares, or
(b) complete and deliver the power of attorney included in the Chilean Offer
materials or with the Company's notice of the Shareholders Meeting, in
accordance with the instructions set forth therein. Holders of ADSs who desire
to vote in favor of the Bylaw Amendments and who have questions as to voting
procedures should contact The Bank of New York, as Depositary of the ADSs.
How do I tender my Shares and ADSs in the U.S. Offer?
To tender your Shares in the U.S. Offer, prior to 12:00 noon, New York City
time, on Friday, June 29, 2001, unless the U.S. Offer is extended:
. you must deliver the Titulos representing your Shares, together with a
completed Form of Acceptance and all documents identified in the Form of
Acceptance, to the Receiving Agent at the address appearing on the back
cover page of this U.S. Offer to Purchase. If your Shares are held in
"street name," the Shares can be tendered by your nominee through The
Depository Trust Company; or
. the Receiving Agent must receive a confirmation of receipt of your Shares by
book-entry transfer
3
and a properly completed and duly executed Form of Acceptance together with
all required documents.
To tender your ADSs in the U.S. Offer, prior to 12:00 noon, New York City
time, on Friday, June 29, 2001, unless the U.S. Offer is extended:
. you must deliver your ADRs representing ADSs and a properly completed and
duly executed ADS Letter of Transmittal to the Receiving Agent at the
address appearing on the back cover page of this U.S. Offer to Purchase. If
your ADSs are held in "street name," the ADSs can be tendered by your
nominee through The Depository Trust Company;
. the Receiving Agent must receive a confirmation of receipt of your ADSs by
book-entry transfer; or
. if you cannot get any document or instrument that is required to be
delivered to the Receiving Agent by the expiration of the U.S. Offer, you
may get extra time to do so by having a broker, a bank or other fiduciary
which is a member of the Securities Transfer Agents Medallion Program or
other eligible institution guarantee that the missing item will be received
by the Receiving Agent within three New York Stock Exchange ("NYSE") trading
days. For the tender to be valid, however, the Receiving Agent must receive
the missing items within that three trading day period. See Section 4.
Until what time can I withdraw previously tendered Shares?
You can withdraw Shares or ADSs from the U.S. Offer at any time until the U.S.
Offer has expired and, if the Purchaser has not agreed by July 29, 2001 to
accept your Shares or ADSs for payment, you can withdraw them at any time
after such time until the Purchaser accepts your Shares or ADSs for payment.
This right to withdraw will not apply to any subsequent offering period. See
Sections 1 and 5.
How do I withdraw previously tendered Shares?
To withdraw Shares or ADSs, you must deliver a written or facsimile notice of
withdrawal with the required information to the Receiving Agent while you
still have the right to withdraw the Shares or ADSs. See Section 5.
Will the Offers be followed by a merger?
The Purchaser does not have any present plans to effect a merger following the
completion of the Offers. However, Chilean law requires the Purchaser to
launch a subsequent tender offer if the Purchaser purchases more than 66 2/3%
of the Shares (including Shares represented by ADSs) in the Offers. If
required by Chilean law, the Purchaser intends to launch such a subsequent
tender offer in Chile, and if required by law, in the United States.
Does the Company support the U.S. Offer?
As of the date of this U.S. Offer to Purchase, the Company's Board of
Directors has not reviewed the U.S. Offer and has not taken a position with
respect to the U.S. Offer. Pursuant to Rule 14e-2 under the Exchange Act, the
Company is required within ten days of the date of this U.S. Offer to Purchase
to provide the Shareholders with a statement of its position with respect to
the U.S. Offer.
Have any Shareholders agreed to tender their Shares?
Yes. The Principal Shareholders who own approximately 28% of the Shares have
agreed to tender all of their Shares in the Chilean Offer and all of their
ADSs in the U.S. Offer, subject to certain conditions. See Section 12.
Will the Company continue as a public company?
Subject to applicable laws and rules of the Chilean authorities and the stock
exchanges, the Purchaser intends to cause the Company to delist the Shares
from the Chilean stock exchanges and to cease being subject to the reporting
requirements applicable to publicly traded companies in Chile. Subject to
applicable laws and the rules of the NYSE, the Purchaser intends to cause the
Company to delist the ADSs from the NYSE following consummation of the Offers.
Additionally, subject to applicable law, the Purchaser also intends to cause
the Company to cease being subject to the periodic reporting requirements
provided for under the rules of the Commission relating to publicly held
companies.
4
If I decide not to tender, how will the U.S. Offer affect my Shares and ADSs?
The purchase of Shares and ADSs will substantially reduce the number of
Shareholders, and the number of Shares and ADSs which are still in the hands
of the public may be so small that there will no longer be an active public
trading market (or, possibly, there may not be any public trading market) for
the Shares or the ADSs. See the "Introduction" and Section 13.
What is the market value of my Shares and ADSs as of a recent date?
Between January 1, 2001 and March 31, 2001, the closing price of Shares ranged
between Ch$520.00 and Ch$585.00 per Share. The Offer Price of US$1.25 per
Share represents a 29.5% premium to the average closing price during the 90-
day period prior to the Company's disclosure on April 27, 2001 that the
Principal Shareholders were in discussions to sell their investment in the
Company. On May 18, 2001, the last trading day before IVAX announced the U.S.
Offer, the closing price of Shares reported on the Santiago Stock Exchange was
Ch$745 per Share.
Between January 1, 2001 and March 31, 2001, the closing price of ADSs ranged
between $18.00 and $21.00 per ADS. On May 18, 2001, the last trading day
before IVAX announced the Offers, the closing price of ADSs reported on the
NYSE was $24.42 per ADS. You should obtain a recent quotation for Shares and
ADSs in deciding whether to tender your Shares and/or ADSs. See Section 7.
Who can I talk to if I have questions about the U.S. Offer?
You can call either D.F. King & Co., Inc., the Information Agent, toll free at
(800) 758-5880 or Merrill Lynch & Co. or UBS Warburg, the Dealer Managers,
collect at (212) 236-3790 or (212) 821-3983, respectively.
5
To the U.S. Holders of Shares of Common Stock and
All Holders of American Depositary Shares of the Company:
INTRODUCTION
IVAX Holdings C.I., a Cayman Islands company and a wholly-owned
subsidiary of IVAX, hereby offers to purchase from all holders of ADSs and all
U.S. holders of Shares, all outstanding Shares and ADSs held by such persons
at a price equal to $1.25 per Share and $25.00 per ADS, net to the seller in
cash and without interest thereon, in each case upon the terms and subject to
the conditions set forth in this U.S. Offer to Purchase and in the related
Form of Acceptance, ADS Letter of Transmittal and ADS Notice of Guaranteed
Delivery.
Concurrent with the U.S. Offer, Inversiones Glaciar is offering to
purchase from all holders of Shares, including U.S. holders of Shares, all
outstanding Shares held by such persons at a price per Share equal to $1.25.
All of the outstanding Shares (including Shares represented by ADSs) are being
sought in the Offers.
In the event that the price per Share to be paid in the Chilean Offer is
increased, the Purchaser will make a corresponding increase to the price paid
per Share and ADS in the U.S. Offer.
The Estatutos of the Company (the "Bylaws") currently prohibit any
person from owning and voting, directly or indirectly through related parties,
more than 49.9% of the voting capital stock of the Company. Accordingly, the
Offers are subject to the satisfaction of the Bylaw Amendments Condition. In
order for the Bylaw Amendments Condition to be satisfied, an extraordinary
meeting of the Shareholders must be called to consider amending the Bylaws to
eliminate or modify certain provisions of the Company's Bylaws in order to
eliminate the ownership limitations. Approval of the Bylaw Amendments requires
the affirmative vote of at least 75% of the outstanding Shares (including
Shares represented by ADSs). Pursuant to the Agreement to Tender, the
Principal Shareholders have agreed to request that the Company's Board of
Directors call the Shareholders Meeting. On May 30, 2001, the Principal
Shareholders notified the Company of their request for the Company to hold a
Shareholders Meeting to vote on the Bylaw Amendments. The Agreement to Tender
provides that the Shareholders Meeting will be held no earlier than nine
calendar days prior to the expiration of the Offer (June 20, 2001) and no
later than five business days prior to the expiration of the Offer (June 22,
2001). As a result, the Principal Shareholders have requested, and the Company
has agreed, that the Shareholders Meeting be held on June 22, 2001. If the
Bylaw Amendments are not approved by the requisite vote of holders of
outstanding Shares, the conditions to the Offers cannot be met and the Offers
will be terminated.
Should holders of at least 75% of the outstanding Shares (including
Shares represented by ADSs) approve the Bylaw Amendments, Chilean law requires
the publication and recording of the Shareholder approval before the Bylaw
Amendments can be effective. The time required to obtain the publication and
recording of the Shareholder approval is uncertain. While there can be no
assurance as to this timing, we expect that these actions could be
accomplished within five business days.
The Offers are currently scheduled to expire at 12:00 noon, New York
City time, on Friday, June 29, 2001.
Tendering holders of Shares whose Shares are registered in their own
name and who tender directly to the Receiving Agent will not be obligated to
pay brokerage fees, commissions or stock transfer taxes on the sale of their
Shares pursuant to the U.S. Offer. Tendering holders of ADSs who have ADSs
registered in their own name and who tender directly to the Receiving Agent
will not be obligated to pay brokerage fees, commissions or, except as set
forth in Instruction 6 of the ADS Letter of Transmittal, transfer taxes on the
sale of their ADSs pursuant to the U.S. Offer. Tendering holders of Shares and
tendering holders of ADSs who own Shares and/or ADSs through a broker or other
nominee, and such broker or nominee tenders their Shares and/or ADSs on their
behalf, may have to pay a fee to such broker or nominee. The Purchaser and
IVAX will pay all charges and expenses of the Dealer Managers, the Receiving
Agent and the Information Agent incurred in connection with the U.S. Offer.
See Section 17.
6
According to information provided by the Company, as of April 30, 2001,
there were 316,000,000 Shares outstanding, including 64,187,140 Shares
represented by ADSs. IVAX does not currently own any Shares or ADSs.
The purpose of the U.S. Offer and the Chilean Offer is to acquire
control of, and all of the equity interest in, the Company. IVAX intends, as
soon as practicable after consummation of the Offers, to seek majority
representation on the Company's Board of Directors.
This U.S. Offer to Purchase and the related Form of Acceptance, ADS
Letter of Transmittal and ADS Notice of Guaranteed Delivery contain important
information and should be read carefully in their entirety before any decision
is made with respect to the U.S. Offer.
RELIEF GRANTED BY THE COMMISSION
In order to facilitate the making of the U.S. Offer, the Commission has
orally granted the Purchaser and its subsidiaries, IVAX and its subsidiaries,
the Dealer Managers, Purchaser or its subsidiaries, in each case acting as
their agents, certain exemptive relief from the provisions of Rule 14d-10
under the Exchange Act (the "14d-10 Exemption") and Rule 14e-5 under the
Exchange Act (the "14e-5 Exemption").
Rule 14d-10(a)(1) under the Exchange Act provides that no person shall
make a tender offer unless the offer is open to all security holders of the
class of securities subject to the tender offer. Accordingly, in the absence
of exemptive relief, the application of Rule 14d-10(a)(1) would prohibit the
dual structure of the Offers. The 14d-10 exemption permits the U.S. Offer to
be open only to U.S. holders of Shares and holders of ADSs.
Rule 14e-5 prohibits a person making a cash tender offer for an equity
security registered under Section 12 of the Exchange Act from, directly or
indirectly, purchasing or making any arrangement to purchase such equity
security or any security convertible into, or exchangeable for, such equity
security, otherwise than pursuant to the tender offer, from the time the offer
is publicly announced until its expiration. Accordingly, in the absence of the
exemptive relief, the application of Rule 14e-5 would prohibit the Purchaser
and its affiliates from purchasing Shares pursuant to the Chilean Offer. The
14e-5 Exemption permits the purchase of Shares by the Purchaser and its
affiliates pursuant to the Chilean Offer during (but outside) the U.S. Offer
and the entering, by such persons, into such arrangements and agreements and
the taking by such persons of such other steps, as may be necessary or
advisable under Chilean law to effect the Chilean Offer.
The Commission has indicated that it will confirm in writing the
exemptive relief described above.
CONSENT TO BYLAW AMENDMENTS
The Offers will not proceed unless the Shareholders approve the Bylaw
Amendments by the affirmative vote of holders of at least 75% of the
outstanding Shares (including Shares represented by ADSs).
The Bylaws currently provide that no person may own or vote, directly or
indirectly through related parties, more than 49.9% of the voting capital
stock of the Company and that the Company shall otherwise comply with the
provisions of Decree Law 3,500, including Chapter XII thereof. Among other
things, Chapter XII provides that no Shareholder, directly or indirectly
through related persons, may own or vote more than 65% or such lesser amount
as may be specified in a company's bylaws, of the voting capital stock of such
company. The Offers are subject to the satisfaction of the Bylaw Amendments
Condition set forth in Section 15. In order for this condition to be
satisfied, the holders of at least 75% of the outstanding Shares, including
Shares represented by ADSs, must approve the Bylaw Amendments and they must
become effective under Chilean law.
Under Chilean law, holders of at least 10% of the outstanding capital
stock have the right to require a company to convene a meeting of its
shareholders. Under Chilean law, shareholders must be notified of such a
7
meeting at least 15 days prior to the date of the meeting and the meeting must
be held within 30 days of the date on which a company receives notice of such
a demand from a 10% or more shareholder. The Principal Shareholders agreed in
the Agreement to Tender to exercise their right as a 10% or more Shareholder
to make a Shareholder's demand for the Company to hold a Shareholders Meeting
in order to approve the Bylaw Amendments.
On May 30, 2001, the Principal Shareholders notified the Company of
their request for the Company to hold a Shareholders Meeting to vote on the
Bylaw Amendments. The Agreement to Tender provides that the Shareholders
Meeting will be held no earlier than nine calendar days prior to the
expiration of the Offer (June 20, 2001) and no later than five business days
prior to the expiration of the Offer (June 22, 2001). As a result, the
Principal Shareholders have requested, and the Company has agreed, that the
Shareholders Meeting be held on June 22, 2001.
At the Shareholders Meeting, the Shareholders will consider amending the
Bylaws to eliminate Articles 6 bis, 18 bis, 20 bis, 34 bis, 35 bis, 53 and 56
and to modify Articles 1, 6, 20 and 39. Articles 1, 6 and 20 provide that the
Company is subject to Decree Law 3,500. Article 6 bis provides that no one
person, or group of related persons, may own or be entitled to vote, more than
49.9% of the outstanding capital stock of the Company. Article 18 bis requires
acts and contracts between the Company and its majority shareholders,
directors or executives or with persons related to any such person to be
approved in advance by two-thirds of the Board of Directors of the Company and
to be recorded in the corresponding minutes of the meeting of the Board of
Directors. Article 20 bis requires Shareholders to receive prior to the annual
shareholder meeting the report issued by the inspector of accounts pursuant to
Article 34 bis and the board of directors' proposal with respect to the
Company's investment and financing policies. Article 34 bis requires
shareholders to approve the investment and financing policies proposed by
management in accordance with Decree Law 3,500 and to annually appoint two
account inspectors and two alternates with the powers set forth in Article 51
of Law No. 18,046. Article 35 bis requires approval at a specially convened
shareholders' meeting to transfer assets or rights identified by the
investment and financing policies as essential for the conduct of the
Company's business, as well as any change to the investment and financing
policies approved by the Shareholders. Article 39 provides that the
Shareholders have the right to one vote for each Share they own or represent,
and they may aggregate or distribute the votes when voting; provided however,
that no Shareholder may exercise on his own behalf or that of other
Shareholders the right to vote for a percentage of subscribed voting shares in
excess of the maximum concentration permitted in the Bylaws. Article 53
provides that the appraisal rights of a pension fund administrator conferred
under Decree Law 3,500 are subject to special rules. Article 56 requires
maintenance of certain asset ratios set forth in Decree Law 3,500.
Pursuant to Chilean law, the Bylaw Amendments, even if adopted by the
holders of more than 75% of the outstanding Shares as required by the Bylaw
Amendments, will not become effective until they are published and recorded.
While there can be no assurance as to this timing, we expect that these
actions could be accomplished within five business days. The Bylaw Amendments
Condition will not be satisfied until the Bylaw Amendments are effective under
Chilean law.
If a company complies with Chapter XII, Chilean pension funds may invest
a larger portion of their assets in such companies than in companies that are
not subject to Chapter XII. Generally, companies that elect to comply with
Chapter XII are required to include in their bylaws the following provisions:
(a) no person, directly or indirectly through a related party, may own or vote
more than a specified percentage of the outstanding voting capital stock of
the company, which percentage may not exceed 65%; (b) minority shareholders
must hold at least 10% of the outstanding voting capital stock of the company;
and (c) at least 15% of the voting capital stock of the company shall be owned
by more than 100 shareholders, each owning shares with a value of at least a
specified amount. The company's bylaws must also provide that the company
maintain a minimum ratio relating to the company's adjusted assets to total
assets, as determined in accordance with Decree Law 3,500, and that the
shareholders shall approve investment and financing policies and the sale of
assets identified by the company's investment and financing policies as
essential to the conduct of the company's
8
business. If the Shareholders approve the Bylaw Amendments, the Company will
no longer be subject to Decree Law 3,500. As a result, the amount of the
investments the Chilean pension funds are permitted to maintain will be less
than if the Company continued to be subject to such laws.
Voting Procedures -- Holders of Shares. In order to vote Shares in favor
of the Bylaw Amendments, holders of Shares must either (a) appear in person at
the Shareholders Meeting when it is scheduled by the Company and vote their
Shares, or (b) complete and deliver the Power of Attorney included in the
Chilean Offer materials or with the Company's notice of the Shareholders
Meeting, in accordance with the instructions set forth therein.
Voting Instructions -- Holders of ADSs. Holders of ADSs who desire to
vote in favor of the Bylaw Amendments and who have questions as to voting
procedures should contact The Bank of New York, as Depositary of the ADSs.
The Deposit Agreement pursuant to which the ADSs are issued provides
that, upon receipt of any notice of any meeting of holders of Shares, the ADS
Depositary will provide to the ADS holders copies of all materials received by
it and request from such holders voting instructions. Upon receipt of any such
instructions, the ADS Depositary is required to vote or cause to be voted (or
to grant a proxy to a person designated by the Company to vote) the ADSs in
accordance with the instructions set forth in such request. The ADS Depositary
shall not, under any circumstance, exercise any voting discretion over the
ADSs. If no voting instructions are received by the ADS Depositary on or
before the cut-off date with respect to any vote of Shareholders, then a
holder shall be deemed to have instructed the ADS Depositary to give a
discretionary proxy to the Chairman of the Board of Directors of the Company
on any matters other than any matter as to which the Chairman of the Board of
Directors of the Company does not wish such proxy given. Currently, The Bank
of New York is the ADS Depositary.
Pursuant to the Agreement to Tender, if Shares representing at least the
Minimum Condition are tendered prior to the Shareholders Meeting (regardless
of whether such Shares are subsequently withdrawn), IVAX has agreed with the
Principal Shareholders to waive the Minimum Condition and the conditions set
forth in paragraphs (c), (d), (g) and (h) of Section 15. IVAX has also agreed
with the Principal Shareholders to waive any possible default of a condition
or failure to meet a condition that may have occurred or be deemed to have
occurred pursuant to any of the conditions, other than the conditions set
forth in paragraphs (c), (d), (g) and (h) of Section 15, as a result of or
with respect to any circumstance, event or incident occurring or existing
prior to the Shareholders Meeting that IVAX knew of or should have known of at
such time. IVAX' obligation with respect to the waivers referred to above is
conditioned on IVAX receiving a certificate from a representative of each of
the Principal Shareholders that, to such person's knowledge, after due
inquiry, no event or incident has occurred that would cause a default of any
of these conditions. If the Minimum Condition has been satisfied and IVAX
waives certain conditions as described above, the Principal Shareholders will
be obligated to vote in favor of the approval of the Bylaw Amendments.
However, if Shares representing at least the Minimum Condition are not
tendered prior to the Shareholders Meeting, IVAX will not be required to waive
the certain conditions as described above and the Principal Shareholders will
not be required to vote in favor of adoption of the Bylaw Amendments. Since
the approval of holders of 75% of the outstanding Shares is required to adopt
the Bylaw Amendments, the Bylaw Amendments cannot be adopted without the
affirmative vote of the Principal Shareholders. If the Bylaw Amendments are
not adopted, the conditions to the Offers cannot be satisfied and IVAX intends
to terminate the Offers.
As a result of the foregoing, U.S. holders of Shares and holders of ADSs
who want to tender into the U.S. Offer and receive the Offer Price should
tender their Shares or ADSs prior to the Shareholders Meeting and vote in
favor of the adoption of the Bylaw Amendments. Failure to satisfy the Minimum
Condition prior to the Shareholders Meeting may result in the Bylaw Amendments
being defeated and a termination of the Offers or may result in the Offers
continuing to be subject to certain conditions that IVAX would otherwise be
required to waive.
9
THE U.S. OFFER
1. Terms of the U.S. Offer; Expiration Date.
Upon the terms and subject to the conditions set forth in the U.S.
Offer, the Purchaser will accept for payment and pay for all Shares and ADSs
that are validly tendered by the Expiration Date and not withdrawn as provided
in Section 5. The term "Expiration Date" shall mean 12:00 noon, New York City
time, on Friday, June 29, 2001, unless the Purchaser shall have extended the
period of time in which the U.S. Offer will remain open, in which event the
term "Expiration Date" shall mean the latest time and date on which the U.S.
Offer, as so extended by the Purchaser, shall expire.
The U.S. Offer is subject to certain conditions set forth in Section 15,
including satisfaction of the Bylaw Amendments Condition. If any such
condition is not satisfied, the Purchaser may terminate the U.S. Offer and
return all tendered Shares and ADSs to tendering Shareholders, extend the U.S.
Offer and, subject to withdrawal rights as set forth in Section 5, retain all
such Shares and ADSs until the expiration of the U.S. Offer as so extended,
waive such conditions and, subject to any requirement to extend the period of
time during which the U.S. Offer is open, purchase all Shares and ADSs validly
tendered by the Expiration Date and not withdrawn, or delay acceptance for
payment or payment of Shares and ADSs, subject to applicable law, until
satisfaction or waiver of the conditions of the U.S. Offer. For a description
of the Purchaser's right to extend the period of time during which the U.S.
Offer is open and to amend, delay or terminate the U.S. Offer, see Sections 14
and 15.
Notwithstanding the foregoing, pursuant to the terms of the Agreement to
Tender, IVAX will not, without the prior written consent of the Principal
Shareholders, which consent may not be unreasonably delayed, impose additional
conditions to the Offers, change any conditions to the Offers, or otherwise
amend the Offers in any respect. However, IVAX need not obtain the prior
consent of the Principal Shareholders to impose additional conditions or
change any condition if such addition or change is imposed by any securities
authority or does not adversely affect the Shareholders.
Pursuant to the Agreement to Tender, IVAX has agreed that, no later than
the day before the Shareholders Meeting, it shall advise the Principal
Shareholders as to whether it has waived the condition set forth in paragraph
(d) of Section 15. Additionally, if Shares representing at least the Minimum
Condition have been tendered immediately prior to the Shareholders Meeting,
then IVAX has agreed with the Principal Shareholders to waive those conditions
set forth in paragraphs (c), (d), (g) and (h) of Section 15. IVAX has also
agreed with the Principal Shareholders to waive any possible default of a
condition or failure to meet a condition that may have occurred or be deemed
to have occurred pursuant to any of the conditions, other than the conditions
set forth in paragraphs (c), (d), (g) and (h) of Section 15, as a result of or
with respect to any circumstance, event or incident occurring or existing
prior to the Shareholders Meeting that IVAX knew of or should have known of at
such time. IVAX' obligation with respect to the waivers referred to above is
conditioned on IVAX receiving a certificate from a representative of each of
the Principal Shareholders that, to such person's knowledge, after due
inquiry, no event or incident has occurred that would cause a default of any
of these conditions. If IVAX waives such conditions, IVAX will make an
announcement to that effect and disseminate the information concerning the
waiver no later than five business days before the Expiration Date. If IVAX
does not waive these conditions prior to the Shareholders Meeting, then the
Principal Shareholders are not required to vote in favor of the Bylaw
Amendments. As a result of the foregoing, U.S. holders of Shares and holders
of ADSs who want to tender into the U.S. Offer and receive the Offer Price
should tender their Shares or ADSs prior to the Shareholders Meeting and vote
in favor of the adoption of the Bylaw Amendments. Failure to satisfy the
Minimum Condition prior to the Shareholders Meeting may result in the Bylaw
Amendments being defeated and a termination of the Offers or may result in the
Offers continuing to be subject to certain conditions that IVAX would
otherwise be required to waive.
A request has been made to the Company for the use of its Shareholder
registry and security position listings for the purpose of disseminating the
U.S. Offer to holders of Shares and ADSs. This U.S. Offer to
10
Purchase and the related Form of Acceptance, ADS Letter of Transmittal and ADS
Notice of Guaranteed Delivery will be mailed to record holders of ADSs and
holders of Shares who are U.S. holders and will be furnished to brokers, banks
and similar persons whose names, or the names of whose nominees, appear on the
Shareholder list or, if applicable, who are listed as participants in a
clearing agency's security position listing, for subsequent transmittal to
beneficial owners of ADSs and beneficial owners of Shares who are U.S.
holders.
2. Acceptance for Payment.
Upon the terms and subject to the conditions of the U.S. Offer, the
Purchaser will accept for payment the Shares and ADSs validly tendered by the
Expiration Date and not withdrawn, and promptly after the Expiration Date pay
for such Shares and ADSs. In addition, the Purchaser reserves the right, in
its sole discretion and subject to applicable law, to delay the acceptance for
payment or the payment for Shares and ADSs in order to comply in whole or in
part with any applicable law. For a description of the Purchaser's right to
terminate the U.S. Offer and not accept for payment or pay for Shares and/or
ADSs or to delay the acceptance for payment or the payment for Shares and
ADSs, see Section 14.
For purposes of the U.S. Offer, the Purchaser shall be deemed to have
accepted for payment tendered Shares and ADSs when and if the Purchaser gives
oral or written notice to the Receiving Agent of its acceptance of the tenders
of such Shares and ADSs. Payment for Shares and ADSs accepted for payment
pursuant to the U.S. Offer will be made by deposit of the purchase price with
the respective Receiving Agent which will act as agent for the tendering
Shareholders for the purpose of receiving payments from the Purchaser and
transmitting such payments to tendering Shareholders. In all cases, payment
for Shares and ADSs accepted for payment pursuant to the U.S. Offer will be
made only after timely receipt by the Receiving Agent of Titulo(s) or a
certificate from the DCV for such Shares and by the Receiving Agent of ADRs
for such ADSs (or of a confirmation of a book-entry transfer of such Shares
and ADSs, into the respective Receiving Agent's account at the Book-Entry
Transfer Facility (as defined in Section 4)), a properly completed and duly
executed Form of Acceptance (in the case of Shares) or ADS Letter of
Transmittal (in the case of ADSs) (or facsimiles thereof) and all other
required documents. Accordingly, payment may be made to tendering Shareholders
at different times if delivery of the Shares and ADSs and other required
documents occur at different times. For a description of the procedure for
tendering Shares and ADSs pursuant to the U.S. Offer, see Sections 3 and 4.
Under no circumstances will interest be paid by the Purchaser on the purchase
price paid for Shares and ADSs pursuant to the U.S. Offer regardless of any
delay in making such payments.
If the Purchaser increases the purchase price to be paid for Shares and
ADSs pursuant to the Chilean Offer, the Purchaser will pay such increased
consideration for all Shares and ADSs purchased pursuant to the U.S. Offer.
The purchase price for the ADSs accepted for payment pursuant to the
U.S. Offer will be paid in U.S. dollars. The purchase price for the Shares
accepted for payment pursuant to the U.S. Offer will be paid in Chilean pesos,
calculated at the Observed Exchange Rate for the Expiration Date. All
tendering holders will bear exchange rate risks and costs if they wish to
convert the currency received into another currency. In addition, the right of
a holder of Shares to convert Chilean pesos received upon the sale of its
Shares pursuant to the U.S. Offer into another currency and to expatriate
these proceeds to a country other than Chile may be affected by the terms of
the foreign investment contract pursuant to which such holder acquired its
Shares. Shareholders should be aware that they will bear additional exchange
rate risks should the U.S. Offer be extended.
The Purchaser reserves the right to transfer or assign, in whole or,
from time to time, in part, to one or more of its affiliates the right to
purchase Shares and ADSs tendered pursuant to the U.S. Offer, but any such
transfer or assignment will not relieve the Purchaser of its obligations under
the U.S. Offer or prejudice the rights of tendering Shareholders to receive
payment for Shares and ADSs validly tendered and accepted for payment.
11
If any tendered Shares and ADSs are not purchased pursuant to the U.S.
Offer for any reason, or if certificates are submitted for more Shares and
ADSs than are tendered, certificates for such unpurchased or untendered Shares
and ADSs will be returned (or, in the case of Shares and ADSs tendered by
book-entry transfer, such Shares and ADSs will be credited to an account
maintained at the Book-Entry Transfer Facility), without expense to the
tendering Shareholder, as promptly as practicable following the expiration or
termination of the U.S. Offer.
3. Procedure for Accepting the U.S. Offer -- Holders of Shares.
Any U.S. holders who hold Shares and who desire to accept the U.S. Offer
in respect of all or any portion of such holder's Shares should complete Boxes
1 and 3 and, if appropriate, Box 4 and sign Box 2 of the Form of Acceptance in
accordance with the instructions printed thereon. An accepting holder of
Shares should submit the completed Form of Acceptance, together with the
following documents to the Receiving Agent at the address set forth on the
back cover of the U.S. Offer to Purchase:
(a)Titulo(s) evidencing ownership of Shares, if Shares are held in
certificated form,
(b)a certificate from the Company registry or the DCV evidencing the
number of Shares, if any, held on deposit at the DCV, the number of Shares and
original issued Shares, if any, held by the holder, and indicating the liens
or encumbrances that effect the Shares,
(c)duly signed Traspaso(s) indicating the number of Shares and the
number of original issue Shares, if any, to be tendered, with the date of such
Traspaso(s) in blank,
(d)in the case of Shares held on deposit at the DCV, a letter to the DCV
instructing the DCV to perform a book-entry transfer in favor of the
Purchaser,
(e)in the case the U.S. holder is an individual, (i) a copy of the U.S.
holder's passport or photo identification card, and
(f)in the case the U.S. holder is an entity, (i) a Secretary's
certificate certifying the name, title and specimen signature of an officer
authorized to execute the transfer documents and a copy of the entity's
organizational documents, and (ii) a copy of the passport or photo
identification card of the authorized officer, and
(g)any other documents requested by the Receiving Agent to evidence the
authority of the U.S. holder to tender and sell its Shares.
References in this Section to a holder of Shares shall include
references to the person or persons executing a Form of Acceptance and, in the
event of more than one person executing a Form of Acceptance, the provisions
of this Section shall apply to them jointly and severally.
Book-Entry Transfer. Shares held in book-entry form may be tendered by
sending or submitting by hand to the Receiving Agent at its address set forth
on the back cover of this U.S. Offer to Purchase a completed Form of
Acceptance, together with items (b) through (h) above.
Certificates of Title And/or Other Document(s) of Title. If the
Titulo(s) have been issued but have been lost or destroyed, the Form of
Acceptance should nevertheless be completed, signed and returned to the
Receiving Agent as soon as possible and the Titulo(s) should be forwarded as
soon as possible thereafter but in no event later than the Expiration Date. If
the Titulo(s) are lost, the holder of Shares should follow the procedures set
forth in Article 21 of the Rules of Law 18.046 of the Chilean Companies Law
and thereupon request the Gerente General of the Company, at Avenida Maraton
No. 1315, Santiago, Chile, telephone (562) 365-5000 to issue substitute
Titulo(s). When completed, the new Titulo(s) must be submitted to the
Receiving Agent, in accordance with the above-described procedure, in support
of the Form of Acceptance.
THE METHOD OF DELIVERY OF TITULO(S) FOR SHARES AND ALL OTHER REQUIRED
DOCUMENTS IS AT THE OPTION AND RISK OF THE TENDERING SHAREHOLDER AND THE
DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
12
RECEIVING AGENT. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE A
TIMELY DELIVERY. REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED FOR SHARES SENT BY MAIL.
Form of Acceptance. Each holder of Shares by whom or on whose behalf a
Form of Acceptance is executed irrevocably undertakes, represents, warrants
and agrees to and with the Purchaser (so as to bind the holder and the
holder's personal representatives, heirs, successors and assigns) to the
following effect:
(a)that the execution of a Form of Acceptance shall constitute: (i) an
acceptance of the U.S. Offer in respect of the number of Shares identified in
Box 1 of the Form of Acceptance; and (ii) an undertaking to execute all
further documents and give all further assurances which may be required to
enable the Purchaser to obtain the full benefit of this Section 2 and/or
perfect any of the authorities expressed to be given hereunder, on and subject
to the terms and conditions set out or referred to in this document and the
Form of Acceptance and that, subject only to the rights set out in Section 5,
each such acceptance shall be irrevocable;
(b)that the Shares in respect to which the U.S. Offer is accepted or
deemed to be accepted are fully paid and non-assessable sold free from all
liens, equities, charges and encumbrances and together with all rights now or
hereafter attaching thereto, including voting rights and the right to all
dividends, other distributions and interest payments hereafter declared, made
or paid;
(c)that the execution of the Form of Acceptance constitutes, subject to
the accepting holder not having validly withdrawn his or her acceptance, the
irrevocable appointment of the Receiving Agent acting on behalf of the
Purchaser, its directors and agents as such holder's attorney and/or agent
(the "Attorney") and an irrevocable instruction to the Attorney to complete
and execute his or her signed Traspaso(s) and all or any form(s) of transfer
and/or other document(s) at the discretion of the Attorney in relation to the
Shares referred to in paragraph (a) above in respect of which the accepting
holder of Shares has not validly withdrawn acceptance in favor of the
Purchaser or such other person or persons as the Purchaser may direct and to
deliver such form(s) of transfer and/or other document(s) at the discretion of
the Attorney together with the Titulo(s) and/or other document(s) of title
relating to such Shares and to do all such other acts and things as may in the
opinion of the Attorney be necessary or expedient for the purpose of, or in
connection with, the acceptance of the U.S. Offer and to vest in the Purchaser
or its nominee(s) the Shares as aforesaid;
(d)that the execution of the Form of Acceptance constitutes, subject to
the accepting holder of Shares not having validly withdrawn its acceptance, an
irrevocable authority and request (i) to the Company, its Gerente General or
its agents to procure the registration of the transfer of the Shares pursuant
to the U.S. Offer and the delivery of the new Titulo(s) and/or other
document(s) of title in respect thereof to the Purchaser or as the Purchaser
may direct; and (ii) to the Purchaser or its agents to record and act upon any
instructions with regard to notices and payments which have been recorded in
the records of the Company in respect of such holder's holding(s) of Shares;
(e)that the holder of Shares will deliver to the Receiving Agent at the
address shown on the back page of the U.S. Offer to Purchase such holder's
Titulo(s) and/or document(s) of title in respect of the Shares referred to in
paragraph (a) or an indemnity acceptable to the Purchaser in lieu thereof, as
soon as possible;
(f)that this Section shall be incorporated in and form part of the Form
of Acceptance, which shall be read and construed accordingly; and
(g)that the holder agrees to ratify each and every act or thing which
may be done or effected by the Purchaser or any of its directors or agents or
the Company or its agents, as the case may be, in the proper exercise of any
of its power and/or authorities thereunder.
Partial Tenders. If fewer than all of the Shares delivered to the
Receiving Agent are to be tendered, the holder thereof should so indicate in
the Form of Acceptance by filling in the number of Shares which are to be
tendered in Box 1 of the Form of Acceptance. In such case, a new Titulo for
the remainder of the Shares
13
represented by the old Titulo will be sent to the person(s) signing such Form
of Acceptance (or delivered as such person properly indicates thereon) as
promptly as practicable following the date the tendered Shares are purchased.
ALL SHARES DELIVERED TO THE RECEIVING AGENT WILL BE DEEMED TO HAVE BEEN
TENDERED UNLESS OTHERWISE INDICATED. SEE INSTRUCTION 1 OF THE FORM OF
ACCEPTANCE.
Acceptance of U.S. Offer and representations by holder. The tender of
Shares pursuant to any one of the procedures described above will constitute
the tendering Shareholder's acceptance of the U.S. Offer, as well as the
tendering Shareholder's representation and warranty that (a) such Shareholder
owns the Shares being tendered within the meaning of Rule 14e-4 promulgated
under the Exchange Act, (b) the tender of such Shares complies with Rule 14e-
4, (c) such Shareholder is a U.S. holder within the meaning of Rule 14d-1(d),
and (d) such Shareholder has the full power and authority to tender and assign
the Shares tendered, as specified in the Form of Acceptance. The Purchaser's
acceptance for payment of Shares tendered pursuant to the U.S. Offer will
constitute a binding agreement between the tendering Shareholder and the
Purchaser containing the terms and conditions of the U.S. Offer.
Matters concerning validity, eligibility and acceptance. All questions
as to the form of documents and the validity, eligibility (including time of
receipt) and acceptance for payment of any tender of Shares will be determined
by the Purchaser, in its sole discretion, which determination shall be final
and binding. The Purchaser reserves the absolute right to reject any or all
tenders of Shares determined by it not to be in proper form or the acceptance
for payment of or payment for which may, in the opinion of the Purchaser's
counsel, be unlawful. The Purchaser also reserves the absolute right to waive
any defect or irregularity in any tender of Shares. None of the Purchaser,
IVAX, the Dealer Managers, the Receiving Agent, the Information Agent or any
other person will be under any duty to give notification of any defect or
irregularity in tenders or incur any liability for failure to give any such
notification.
If you are in any doubt about the procedure for tendering Shares into
the U.S. Offer, please telephone the Information Agent at (800) 758-5880 or
the Receiving Agent at (800) 507-9357.
U.S. HOLDERS WHO HOLD SHARES MAY, AT THEIR OPTION, TENDER THEIR SHARES
INTO THE CHILEAN OFFER INSTEAD OF THE U.S. OFFER. ANY U.S. HOLDER OF SHARES
WHO DESIRES TO ACCEPT THE CHILEAN OFFER SHOULD READ CAREFULLY THE PROSPECTO
DATED MAY 30, 2001 AND SHOULD FOLLOW THE PROCEDURES FOR TENDERING SHARES INTO
THE CHILEAN OFFER DESCRIBED IN ANNEX I HERETO.
4. Procedure for Accepting the U.S. Offer -- Holders of ADSs.
To tender ADSs pursuant to the U.S. Offer, (a) a properly completed and
duly executed ADS Letter of Transmittal (or facsimile thereof) and all other
documents required by the ADS Letter of Transmittal must be received by the
Receiving Agent at one of its addresses set forth on the back cover of this
U.S. Offer to Purchase and either ADRs for the ADSs to be tendered must be
received by the Receiving Agent at one of such addresses, (b) a holder's ADSs
must be delivered pursuant to the procedures for book-entry transfer described
below (and a confirmation of such delivery received by the Receiving Agent
including an Agent's Message (as defined below)) in each case by the
Expiration Date, or (c) the guaranteed delivery procedure described below must
be complied with. The term "Agent's Message" means a message, transmitted by
the Book-Entry Transfer Facility (as hereinafter defined) to and received by
the Receiving Agent and forming a part of a book-entry confirmation which
states that the Book-Entry Transfer Facility has received an express
acknowledgment from the participant tendering the ADSs which are the subject
of such book-entry confirmation that such participant has received and agrees
to be bound by the terms of the ADS Letter of Transmittal and that the
Purchaser may enforce such agreement against such participant.
14
Book-entry delivery. The Receiving Agent will establish an account with
respect to the ADSs at The Depository Trust Company ("Book-Entry Transfer
Facility") for purposes of the U.S. Offer within two business days after the
date of this U.S. Offer to Purchase, and any financial institution that is a
participant in the system of the Book-Entry Transfer Facility may make
delivery of ADSs by causing the Book-Entry Transfer Facility to transfer such
ADSs into the Receiving Agent's account in accordance with the procedures of
the Book-Entry Transfer Facility. However, although delivery of ADSs may be
effected through book-entry transfer, an Agent's Message and any other
required documents must, in any case, be received by the Receiving Agent at
one of its addresses set forth on the back cover of this U.S. Offer to
Purchase by the Expiration Date, or the guaranteed delivery procedure
described below must be complied with. Delivery of the ADS Letter of
Transmittal and any other required documents to the Book-Entry Transfer
Facility does not constitute delivery to the Receiving Agent.
Partial tenders. If fewer than all of the ADSs evidenced by ADRs
delivered to the Receiving Agent are to be tendered, the holder thereof should
so indicate in the ADS Letter of Transmittal by filling in the number of ADSs
which are to be tendered in the box entitled "Number of ADSs Tendered" in the
ADS Letter of Transmittal. In such case, a new ADR for the untendered ADSs
represented by the old ADR will be sent to the person(s) signing such ADS
Letter of Transmittal (or delivered as such person properly indicates thereon)
as promptly as practicable following the date the tendered ADSs are accepted
for payment.
ALL ADSs DELIVERED TO THE RECEIVING AGENT WILL BE DEEMED TO HAVE BEEN
TENDERED UNLESS OTHERWISE INDICATED. SEE INSTRUCTION 4 OF THE ADS LETTER OF
TRANSMITTAL.
Signature guarantees. Except as otherwise provided in the next sentence,
all signatures on an ADS Letter of Transmittal must be guaranteed by a
financial institution (including most banks, savings and loan associations and
brokerage houses) which is a participant in the Securities Transfer Agents
Medallion Program (STAMP), the Stock Exchanges Medallion Program (SEMP) or the
NYSE Medallion Program (MSP) (an "Eligible Institution"). Signatures on an ADS
Letter of Transmittal need not be guaranteed (a) if the ADS Letter of
Transmittal is signed by the registered holder(s) of the ADSs tendered
therewith and such holder(s) have not completed either the box entitled
"Special Delivery Instructions" or the box entitled "Special Issuance
Instructions" on the ADS Letter of Transmittal or (b) if such ADSs are
tendered for the account of an Eligible Institution. See Instructions 1 and 5
of the ADS Letter of Transmittal.
Guaranteed delivery. If a Shareholder desires to tender ADSs pursuant to
the U.S. Offer and cannot deliver such ADSs and all other required documents
to the Receiving Agent by the Expiration Date, or such Shareholder cannot
complete the procedure for delivery by book-entry transfer on a timely basis,
such ADSs may nevertheless be tendered if all of the following conditions are
met:
(a)such tender is made by or through an Eligible Institution;
(b)a properly completed and duly executed ADS Notice of Guaranteed
Delivery substantially in the form provided by the Purchaser is received by
the Receiving Agent (as provided below) by the Expiration Date; and
(c)the ADRs for such ADSs, together with a properly completed and duly
executed ADS Letter of Transmittal (or facsimile thereof) with any required
signature guarantee (or, in the case of ADSs held in book entry form, a timely
confirmation of a book-entry transfer of such ADSs into the Receiving Agent's
account at the Book-Entry Transfer Facility together with an Agent's Message),
are received by the Receiving Agent within three NYSE trading days after the
date of execution of the ADS Notice of Guaranteed Delivery.
The ADS Notice of Guaranteed Delivery may be delivered by hand or mail
or transmitted by telegram, telex or facsimile transmission to the Receiving
Agent and must include a guarantee by an Eligible Institution in the form set
forth in such Notice.
Notwithstanding any other provisions hereof, payment for ADSs accepted
for payment pursuant to the U.S. Offer will in all cases be made only after
receipt by the Receiving Agent within the permitted period of time of ADRs
evidencing such ADSs, or of book-entry confirmation with respect to, a
properly completed and
15
duly executed ADS Letter of Transmittal (or facsimile thereof), together with
any required signature guarantees (or, in the case of book-entry transfer, an
Agent's Message) and any other documents required by the ADS Letter of
Transmittal. Accordingly, payment might not be made to all tendering
Shareholders at the same time and will depend upon when ADRs evidencing such
ADSs are received by the Receiving Agent or book-entry confirmations with
respect to such ADSs are received into the Receiving Agent's account at the
Book-Entry Transfer Facility.
THE METHOD OF DELIVERY OF ADSs AND ALL OTHER REQUIRED DOCUMENTS,
INCLUDING THROUGH THE BOOK-ENTRY TRANSFER FACILITY, IS AT THE OPTION AND RISK
OF THE TENDERING SHAREHOLDER AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN
ACTUALLY RECEIVED BY THE RECEIVING AGENT. IN ALL CASES, SUFFICIENT TIME SHOULD
BE ALLOWED TO ENSURE A TIMELY DELIVERY. REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED FOR ADSs SENT BY MAIL.
Acceptance of U.S. Offer and representations by holder. The tender of
ADSs pursuant to any one of the procedures described above will constitute the
tendering Shareholder's acceptance of the U.S. Offer, as well as the tendering
Shareholder's representation and warranty that (a) such Shareholder owns the
ADSs being tendered within the meaning of Rule 14e-4 promulgated under the
Exchange Act, (b) the tender of such ADSs complies with Rule 14e-4, and (c)
such Shareholder has the full power and authority to tender and assign the
ADSs tendered, as specified in the ADS Letter of Transmittal. The Purchaser's
acceptance for payment of ADSs tendered pursuant to the U.S. Offer will
constitute a binding agreement between the tendering Shareholder and the
Purchaser containing the terms and conditions of the U.S. Offer.
Matters concerning validity, eligibility and acceptance. All questions
as to the form of documents and the validity, eligibility (including time of
receipt) and acceptance for payment of any tender of ADSs will be determined
by the Purchaser, in its sole discretion, which determination shall be final
and binding. The Purchaser reserves the absolute right to reject any or all
tenders of ADSs determined by it not to be in proper form or the acceptance
for payment of or payment for which may, in the opinion of the Purchaser's
counsel, be unlawful. The Purchaser also reserves the absolute right to waive
any defect or irregularity in any tender of ADSs. None of the Purchaser, IVAX,
the Dealer Managers, the Receiving Agent, the Information Agent or any other
person will be under any duty to give notification of any defect or
irregularity in tenders or incur any liability for failure to give any such
notification.
If you are in any doubt about the procedure for tendering ADSs, please
telephone the Information Agent at (800) 758-5880, the Receiving Agent at
(800) 507-9357 or Merrill Lynch & Co. or UBS Warburg collect at (212) 236-3790
or (212) 821-3983, respectively.
5. Withdrawal Rights.
Tenders of Shares and ADSs made pursuant to the U.S. Offer may be
withdrawn at any time prior to the Expiration Date. Thereafter, such tenders
are irrevocable, except that they may be withdrawn after July 29, 2001 unless
theretofore accepted for payment as provided in this U.S. Offer to Purchase.
If the Purchaser extends the period of time during which the U.S. Offer is
open, is delayed in accepting for payment or paying for Shares and ADSs, or is
unable to accept for payment or pay for Shares and ADSs pursuant to the U.S.
Offer for any reason, then, without prejudice to the Purchaser's rights under
the U.S. Offer, the Receiving Agent may, on behalf of the Purchaser retain all
Shares and ADSs tendered, and such Shares and ADSs may not be withdrawn except
as otherwise provided in this Section 5. Any such delay will be an extension
of the U.S. Offer to the extent required by law.
For a withdrawal to be effective, a written, telegraphic, telex or
facsimile transmission notice of withdrawal must be timely received by the
respective Receiving Agent at the address set forth on the back cover of this
U.S. Offer to Purchase and must specify the name of the person who tendered
the Shares and/or ADSs to be withdrawn and the number of Shares and/or ADSs to
be withdrawn and the name of the registered holder of
16
Shares and/or ADSs, if different from that of the person who tendered such
Shares and/or ADSs. If the Shares and/or ADSs to be withdrawn have been
delivered to the Receiving Agent, a signed notice of withdrawal with (except
in the case of Shares and ADSs tendered by an Eligible Institution) signatures
guaranteed by an Eligible Institution must be submitted prior to the release
of such Shares and/or ADSs. In addition, such notice must specify, in the case
of Shares and ADSs tendered by delivery of certificates, the name of the
registered holder (if different from that of the tendering Shareholder) and
the serial numbers shown on the particular Titulos and/or ADRs evidencing the
Shares and/or ADSs to be withdrawn or, in the case of Shares and/or ADSs
tendered by book-entry transfer, the name and number of the account at the
Book-Entry Transfer Facility to be credited with the withdrawn Shares and/or
ADSs. Withdrawals may not be rescinded, and Shares and ADSs withdrawn will
thereafter be deemed not validly tendered for purposes of the U.S. Offer.
However, withdrawn Shares and ADSs may be re-tendered by again following one
of the procedures described in Section 3 or Section 4, as applicable, at any
time prior to the Expiration Date.
All questions as to the form and validity (including time of receipt) of
any notice of withdrawal will be determined by the Purchaser, in its sole
discretion, which determination shall be final and binding. None of the
Purchaser, IVAX, the Dealer Managers, the Receiving Agent, the Information
Agent or any other person will be under any duty to give notification of any
defect or irregularity in any notice of withdrawal or incur any liability for
failure to give any such notification.
6. Certain Tax Considerations.
The following describes the material U.S. federal income tax and Chilean
tax consequences of the sale of Shares and/or ADSs pursuant to the U.S. Offer.
For purposes of this discussion, a "U.S. Holder" is a holder of Shares
or ADSs that is, for U.S. federal income tax purposes (a) a citizen or
resident of the United States, (b) a corporation or other entity taxable as a
corporation created or organized in or under the laws of the United States,
any state thereof or the District of Columbia, (c) an estate the income of
which is subject to U.S. federal income taxation regardless of its source or
(d) a trust if (i) a U.S. court can exercise primary supervision over the
administration of such trust and (ii) one or more U.S. persons have the
authority to control all of the substantial decisions of such trust. In the
case of a partnership or other entity taxable as a partnership, any partner
described in any of (a) through (d) of this paragraph is also generally
treated as a U.S. Holder. In addition, a person who transferred property to
certain kinds of trusts, or who is a beneficiary of an estate or certain kinds
of trusts and receives distributions from such an estate or trust, may be
taxable with respect to income of the estate or trust arising from the
exchange of ADSs rather than taxation being imposed on the estate or trust
itself, and such a person should consult their tax advisor regarding the
income tax consequences to them of the U.S. Offer because the discussion below
does not address this particular situation. A "Non-U.S. Holder" is a holder of
Shares or ADSs that is not a U.S. Holder.
U.S. Federal Income Tax Consequences
The following discussion is based upon United States federal income tax
laws presently in force. This discussion is not a full description of all tax
considerations that may be relevant to a decision to sell Shares and/or ADSs
pursuant to the U.S. Offer. In particular, this discussion deals only with
Shares and/or ADSs that are held as capital assets as defined in Section 1221
of the United States Internal Revenue Code of 1986, as amended (the "Code")
and does not address the tax treatment of persons that are subject to special
treatment under the U.S. federal income tax laws. Such persons include, but
are not limited to (a) banks, financial institutions, securities dealers or
traders and insurance companies, (b) tax-exempt entities, (c) persons that
hold Shares and/or ADSs as a hedge or as part of a straddle or "conversion
transaction" with other investors for tax purposes, and persons whose
functional currency is not the United States dollar, (d) persons owning
directly, indirectly or by attribution, currently or during the past five
years, 10% or more of the Shares and/or ADSs, (e) persons who acquired Shares
and/or ADSs pursuant to the exercise of an employee stock option or otherwise
as compensation or (f) certain expatriates or former long-term residents of
the United States. Moreover, the effect of any applicable United States state
or local tax laws is not discussed herein.
17
U.S. Holders
Sale of Shares and/or ADSs. Each U.S. Holder will recognize capital gain
or loss on the sale of Shares or ADSs pursuant to the U.S. Offer in an amount
equal to the difference between the amount of cash received and such U.S.
Holder's adjusted basis in the Shares or ADSs. In general, any gain or loss
recognized upon the sale of Shares or ADSs pursuant to the U.S. Offer will be
treated as long-term capital gain or loss if the Shares or ADSs have been held
for more than one year and otherwise as short-term capital gain or loss.
However, if the Company is or has been a Passive Foreign Investment Company
("PFIC") at any time since 1986, gain recognized by a U.S. Holder may be
treated as ordinary income, and the tax due on such income may be subject to
an interest charge, under certain circumstances. In general, under Section
1297 of the Code, a foreign corporation may be a PFIC with respect to a
taxable year if 75% or more of its gross income for such year is passive
income, as defined in the Code, or if at least 50% of its average percentage
of assets, as defined in the Code, held during the taxable year produce or are
held for the production of passive income. U.S. Holders are urged to consult
their tax advisors regarding the specific tax consequences if the Company was
a PFIC.
Any gain recognized by a U.S. Holder generally will be treated as U.S.
source income. Consequently, in the case of a disposition of Shares (which,
unlike a disposition of ADSs, will be taxable in Chile), the U.S. Holder would
not be able to utilize the foreign tax credit for Chilean tax imposed on the
gain unless the U.S. Holder appropriately can apply the credit against tax due
on income from foreign sources. For foreign tax credit purposes, any loss
recognized by a U.S. Holder generally will be allocated to U.S. source income,
except that such a loss will be allocated to foreign source income to the
extent the U.S. Holder has received certain dividends in the 24 months prior
to recognizing the loss.
Backup Withholding Tax. A. U.S. Holder may be subject to backup
withholding at the rate of 31% on the proceeds from the sale of Shares or ADSs
pursuant to the U.S. Offer. To prevent backup withholding, each U.S. Holder
who accepts the U.S. Offer must provide the respective Receiving Agent with
the holder's correct taxpayer identification number and certify that such
holder is exempt from or otherwise not subject to backup withholding by
completing the Substitute Form W-9 included with the ADS Letter of Transmittal
or with the Form of Acceptance. For further information concerning backup
withholding and instructions for completing the Substitute Form W-9, consult
the enclosed "Guidelines for Certification of Taxpayer Identification Number
of Substitute Form W-9."
Non-U.S. Holders
Sale Of Shares and/or ADSs. Subject to the discussion of backup
withholding below, a Non-U.S. Holder will generally not be subject to United
States federal income or withholding tax on gain realized on the sale of
Shares or ADSs pursuant to the U.S. Offer unless (a) such gain is effectively
connected with such Non-U.S. Holder's conduct of a trade or business within
the United States (or, in the case of a country which has a tax treaty with
the United States, such gain is attributable to a permanent establishment or
fixed place of business in the United States) or (b) such gain is realized by
an individual Non-U.S. Holder who is present in the United States for at least
183 days in the taxable year of the sale and certain other conditions are met.
Backup Withholding. A Non-U.S. Holder may be subject to backup
withholding at the rate of 31% on the proceeds from the sale of Shares or ADSs
pursuant to the U.S. Offer. To prevent backup withholding, each Non-U.S.
Holder who accepts the U.S. Offer must provide the Receiving Agent with a
completed Form W-8 Certificate of Foreign Status prior to receipt of any
payment. A Form W-8 Certificate of Foreign Status may be obtained from the
Receiving Agent.
THE TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION
ONLY AND IS BASED UPON LAWS, REGULATIONS, RULINGS AND DECISIONS NOW IN EFFECT,
ALL OF WHICH ARE SUBJECT TO CHANGE (POSSIBLY RETROACTIVELY). HOLDERS OF SHARES
AND/OR ADSs ARE URGED TO CONSULT THEIR TAX ADVISORS WITH
18
RESPECT TO THE SPECIFIC TAX CONSEQUENCES OF THE U.S. OFFER TO THEM, INCLUDING
THE APPLICATION AND EFFECT OF THE ALTERNATIVE MINIMUM TAX, AND STATE, LOCAL
AND FOREIGN TAX LAWS.
Chilean Tax Consequences For U.S. Holders
Any gain recognized by an individual who is not domiciled or resident in
Chile or any legal entity that is not organized under the laws of Chile and
does not have a permanent establishment in Chile (a "Non-Chilean Holder") upon
the sale of the ADSs pursuant to the U.S. Offer will not be subject to Chilean
taxation.
Gains recognized by a Non-Chilean Holder upon the sale of Shares
pursuant to the U.S. Offer will be subject to the following taxes: (i) a 15%
fixed tax rate, provided that (x) such Shares have been held for at least one
year, (y) the Non-Chilean Holder is not considered to be customarily engaged
in the buying and selling of shares, and (z) such transfer is not made to a
person related to such person; or (ii) in case any of the three requirements
set forth in (i) is not met, such gains will be added to the net taxable
earnings of such person and, as such, are subject to a 15% first category tax,
plus the additional tax at a rate of 35%, minus a credit for the 15% first
category tax already paid on these capital gains. Withholdings on such capital
gains are applicable under Chilean law based on different rates depending on
the final payable tax rate described above.
Any gain recognized by any person other than a Non-Chilean Holder (a
"Chilean Holder") upon the sale of the ADSs pursuant to the US Offer will be
subject to Chilean income taxes by adding such gain to the taxable income of
such Chilean Holder and applying to such income the tax rate which would
otherwise be applicable on such Chilean Holder's income under Chilean law.
No Chilean stamp, issue, registration or similar taxes or duties will
apply to the sale of ADSs or the Shares pursuant to the Offer.
BECAUSE INDIVIDUAL CIRCUMSTANCES MAY DIFFER, YOU SHOULD CONSULT YOUR TAX
ADVISOR REGARDING THE APPLICABILITY OF THE RULES DISCUSSED ABOVE TO YOU AND
THE PARTICULAR TAX EFFECTS TO YOU OF THE OFFER.
7. Price Range of Shares and ADSs; Dividends.
Price Range of Shares. The Shares are listed and traded on the Bolsa de
Comercio de Santiago (the "Santiago Stock Exchange") under the symbol
"LabChile" as reported. The following table sets forth, for the periods
indicated, the quarterly high and low per Share closing prices of the Shares
in Chilean pesos ("Ch$") as reported on the Santiago Stock Exchange. The
following information reflects nominal Chilean peso amounts as of the trade
dates and has not been restated in constant Chilean pesos.
High Low
------ ------
Calendar Year 2001
First Quarter................................................... 585.00 520.00
Second Quarter (through May 30, 2001)........................... 763.00 563.00
Calendar Year 2000
First Quarter................................................... 650.00 495.00
Second Quarter.................................................. 570.00 485.00
Third Quarter................................................... 515.00 440.00
Fourth Quarter.................................................. 530.00 440.00
Calendar Year 1999
First Quarter................................................... 390.00 290.00
Second Quarter.................................................. 486.00 379.00
Third Quarter................................................... 510.00 450.00
Fourth Quarter.................................................. 500.00 425.00
19
On May 18, 2001, the last full day of trading on the Santiago Stock
Exchange prior to the public announcement of the Offers, the reported closing
sales price of the Shares on the Santiago Stock Exchange was Ch$745.00 per
Share. On May 30, 2001, the last full day of trading prior to the date of this
U.S. Offer to Purchase, the reported closing sales price of the Shares on the
Santiago Stock Exchange was Ch$751.00 per Share. Holders of Shares are urged
to obtain a current market quotation for the Shares.
On May 30, 2001, the published Observed Exchange Rate was Ch$607.65 per
US$1.00. Based on such exchange rate, the Chilean peso equivalent of the U.S.
Offer price of $1.25 per Share was Ch$759.56 and the Chilean peso equivalent
of the U.S. Offer price of $25.00 per ADS was Ch$15,191.25. Exchange rates are
subject to fluctuation. Holders are urged to obtain a current market quotation
for the Observed Exchange Rate.
Price range of ADSs. The ADSs are listed and traded on the NYSE under
the symbol "LBC." Each ADS represents 20 Shares. The following table sets
forth, for the periods indicated, the quarterly high and low closing prices of
the ADSs in U.S. dollars as reported by the NYSE.
High Low
----- -----
Calendar Year 2001
First Quarter..................................................... 21.00 18.00
Second Quarter (through May 30, 2001)............................. 25.05 19.00
Calendar Year 2000
First Quarter..................................................... 25.13 18.81
Second Quarter.................................................... 22.69 17.88
Third Quarter..................................................... 19.38 16.13
Fourth Quarter.................................................... 18.44 15.44
Calendar Year 1999
First Quarter..................................................... 15.88 11.44
Second Quarter.................................................... 19.38 15.50
Third Quarter..................................................... 19.50 17.19
Fourth Quarter.................................................... 18.50 15.88
On May 18, 2001, the last full day of trading on the NYSE prior to the
public announcement of the Offers, the reported closing sales price of the
ADSs on the NYSE was US$24.42 per ADS. On May 30, 2001, the last full day of
trading prior to the date of this U.S. Offer to Purchase, the reported closing
sales price of the ADSs on the NYSE was US$24.72 per ADS. Holders of ADSs are
urged to obtain a current market quotation for the ADSs.
Dividends. The table below sets forth the nominal Chilean peso amount of
dividends per Share and U.S. dollar amount of dividends per ADS (each ADS
representing 20 Shares) for fiscal years 1998, 1999 and 2000, as reported in
the Company 20-F and Form 6-Ks filed by the Company on May 1, 2000 and July
24, 2000, respectively, paid in respect of each of the years indicated. Per
ADS amounts are shown without deduction of Chilean withholding taxes.
Per Share Per ADS
--------- -------
(CH$) ($)
--------- -------
1998................................................... 22.50 0.95
1999................................................... 27.00 1.03
2000................................................... 19.00 *
- --------
* Information relating to any dividends paid per ADS in 2000 was not
available in any of the Company's public filings.
To date, for fiscal year 2001, the Company has authorized the payment of
a dividend of Ch$12.00 per Share.
20
8. Certain Information Concerning the Company.
The following and other information contained in this U.S. Offer to
Purchase concerning the Company is taken from the Company 20-F filed for the
year ended December 31, 1999 with the Commission. Although neither the
Purchaser nor IVAX have any knowledge that would indicate that any statements
contained herein based upon such reports and documents are untrue, the
Purchaser and IVAX take no responsibility for the accuracy or completeness of
the information contained in such reports and other documents or for any
failure by the Company to disclose events that may have occurred and may
affect the significance or accuracy of any such information but that are
unknown to the Purchaser.
The Company is a Chilean pharmaceutical company that manufactures,
markets and distributes a diversified pharmaceutical product line of mostly
human pharmaceutical and animal health products, which are not patented in the
countries in which it sells. According to the Company 20-F, the Company
believes, based on available data, that it has the largest share of sales in
the Chilean pharmaceutical market and that it is the largest Chilean exporter
of pharmaceutical products, principally to Central and South America. As part
of its export strategy, the Company has entered into distribution agreements
with third parties in fourteen Latin American countries. The Company is also
present in the Peruvian market through its wholly-owned subsidiary Newpharm
S.A. ("Newpharm"), which distributes the Company's products in Peru.
In addition, through Laboratorios Armstrong S.A.C.I.F. ("Armstrong"), a
wholly owned Argentine pharmaceutical subsidiary, the Company is a local
manufacturer of pharmaceutical products in Argentina. The Company believes,
based on available sales data, that it is ranked among the top ten
pharmaceutical companies operating in Argentina.
In Chile, the Company currently manufactures, markets and distributes
586 different dosage forms of 347 therapeutic compounds packaged in 909
presentations, covering a broad range of therapeutic categories, including:
antibiotic, analgesic, anti-inflammatory, cardiovascular, neurological,
digestive, respiratory, dermatological, gynecological and ophthalmologic
drugs, vitamins and minerals. In Argentina, the Company manufactures and
distributes 140 different dosage forms of 84 therapeutic compounds packaged in
206 presentations, mainly covering eleven therapeutic categories. In Peru, the
Company sells 107 different dosage forms of 12 therapeutic compounds packaged
in 182 presentations.
The Company's strategy for the Chilean market emphasizes selling higher-
margin products in the mix of its sales. One main element of this strategy is
the introduction and promotion of branded products which provide higher
margins. With 33 new products and extensions launched in 1999, the Company has
introduced a total of 301 new branded products since 1990, more than any other
Chilean manufacturer.
The Company has focused its business strategy in Argentina on increasing
sales and market share of branded products in selected therapeutic categories
where they enjoy an established relationship and reputation in the medical
community.
In Peru, the Company distributes products mainly manufactured in Chile
through its subsidiary, Newpharm. The Company's business strategy in Peru is
to enhance Newpharm's position as a distributor of pharmaceutical and cosmetic
products. In addition to selling the Company's generic products, primarily
those with higher margins or that support the sales of branded products,
Newpharm seeks to develop demand for the Company's branded products. Newpharm
is also developing its business by distributing products manufactured by other
producers.
The Company is organized under the laws of the Republic of Chile and has
its principal executive offices located at Avenida Maraton No. 1315, Santiago,
Chile Telephone: (562) 365-5000.
Financial Information. The following table sets forth summary financial
data for the Company as of and for the five-year period ended December 31,
1999. The financial data for each of the fiscal years have been
21
derived from, and are qualified by reference to the Company's financial
statements, which Arthur Andersen Langton Clarke in Chile, the Company's
independent certified public accountants, have audited. The Financial
Statements are prepared in accordance with Chilean GAAP, which differ in
certain significant respects from U.S. GAAP.
As of and for the year ended December 31,
--------------------------------------------------------------------
1995 1996 1997 1998(1) 1999(1) 1999(1)
--------- --------- ---------- ---------- ---------- ----------
(millions of Ch$)(2) (millions
of
US$)(2)(3)
Income Statement Data:
Chilean GAAP:
Net sales............... Ch$31,892 Ch$52,221 Ch$ 88,198 Ch$ 89,524 Ch$ 93,617 US$176.6
Gross margin............ 16,807 30,963 56,283 59,983 62,704 118.3
Operating income........ 4,206 10,113 20,072 21,773 21,797 41.1
Non-operating results... (2,042) (2,453) (9,555) (8,538) (7,007) (13.2)
Income taxes............ (300) (1,188) (3,220) (3,915) (4,334) (8.2)
Net income.............. 1,861 5,802 6,019 9,320 10,456 19.7
Net income per Share.... 6.2 18.7 19.1 29.5 33.1 0.1
Net income per ADS...... 124.0 374.0 382.0 590.0 662.0 1.3
Weighted average Shares
outstanding (in
millions).............. 300 310 316 316 316 316
Dividends per Share..... 5 18 9.5 23.1 27.0 0.1
Dividends per ADS....... 100 360 190 462 540 1.1
U.S. GAAP:
Net income.............. 3,141 7,499 8,675 9,164 11,305 21.3
Net income per Share.... 10.5 24.2 27.5 29.0 35.8 0.1
Net income per ADS...... 210.0 484.0 550.0 580.0 716.0 1.4
Weighted average Shares
outstanding (in
millions).............. 300 310 316 316 316 316
Balance Sheet Data:
Chilean GAAP:
Total assets............ Ch$73,067 Ch$90,658 Ch$115,750 Ch$117,508 Ch$112,472 US$212.2
Long term liabilities... 917 30,008 25,635 19,293 13,371 25.2
Total Shareholders'
equity................. 39,219 45,868 49,526 51,434 53,325 100.6
U.S. GAAP:
Total assets............ 74,635 93,834 121,582 123,658 119,573 225.6
Long term liabilities... 917 30,008 25,635 19,293 13,371 25.2
Total Shareholders'
equity................. 40,455 49,044 53,552 57,584 60,967 115.0
- --------
Note: Calculation discrepancies are due to rounding.
(1) Beginning January 1, 1998, the Company adopted Technical Bulletin 64,
thereby restating its foreign investments in US dollars. Previously the
Company used the Chilean peso as the functional currency for its foreign
investments. In addition, as permitted by the Chilean Superintendency of
Securities and Insurance, for any period commencing on or after January 1,
1998, the Company extended the amortization period of goodwill to twenty
years.
(2) Except Share, per Share and per ADS data.
(3) Chilean peso amounts have been translated into U.S. dollars at the rate of
Ch$530.07:US$1.00, the Observed Exchange Rate for December 31, 1999.
22
Available Information. The Company is subject to the informational
requirements of the Exchange Act applicable to foreign private issuers with
securities registered under Section 12 of the Exchange Act and in accordance
therewith files reports and other information with the Commission relating to
its business, financial condition and other matters. Such reports and other
information may be inspected at the public reference facilities maintained by
the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549 and should also be available for inspection and copying at prescribed
rates at the regional offices of the Commission in New York (7 World Trade
Center, Suite 1300, New York, New York 10048) and Chicago (Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661-5211). Copies of
such material can also be obtained from the Public Reference Section of the
Commission in Washington, D.C. 20549, at prescribed rates. Such material
should also be available for inspection at the library of the NYSE, 20 Broad
Street, New York, New York 10005, on which the ADSs are traded. The Commission
also maintains a website at http://www.sec.gov on which information filed by
the Company with the Commission with respect to the U.S. Offer will be
available.
9. Certain Information Concerning the Purchaser and IVAX.
The Purchaser. The Purchaser is a newly incorporated Cayman Islands
company. All of the issued and outstanding capital stock of the Purchaser is
held directly by IVAX. The principal executive offices of the Purchaser are
located at 4400 Biscayne Boulevard, Miami, Florida 33137 Telephone: (305) 575-
6000. The name, business address, principal occupation or employment,
employment history and citizenship of each director and officer of the
Purchaser and certain other information are set forth in Schedule I hereto.
IVAX. IVAX is a Florida corporation. The principal executive offices of
IVAX are located at 4400 Biscayne Boulevard, Miami, Florida 33137 Telephone:
(305) 575-6000. The name, business address, principal occupation or
employment, employment history and citizenship of each director and officer of
IVAX and certain other information are set forth in Schedule I hereto.
IVAX is a multinational company engaged in the research, development,
manufacture and marketing of pharmaceutical products. IVAX has grown through
the development of proprietary and brand-equivalent products and through
strategic acquisitions, focused primarily on countries whose pharmaceutical
markets are developing, where there is the greatest growth potential.
IVAX' full line of brand-equivalent drugs includes the first FDA-
approved equivalent to branded Taxol(R), a $1.5 billion oncology drug, and it
has marketing applications pending for many other products that are equivalent
to important branded drugs. Based on IVAX' unique patented inhalers, it has
built a strong franchise in the asthma market, and it is expanding that
franchise by conducting studies to support marketing applications for
respiratory products in the United States and in other markets served by IVAX'
global marketing network. IVAX' product pipeline also includes novel compounds
that it has discovered or licensed from third parties, some of which have
already successfully completed Phase II clinical trials and are now undergoing
Phase III trials, which is the final step before submission of applications
for marketing approval.
IVAX' business has grown significantly during the past year. During
2000, IVAX generated net revenues of $793 million, up from $656 million in
1999, and net income of $131 million, up from $71 million in 1999.
Growth Strategies
IVAX expects its future growth to come from the following:
. Discovering and Developing and/or Acquiring New Products. In
October 1999, IVAX dramatically increased the size and scope of
its new product development capability through its acquisition of
an independent research company, now known as IVAX Drug Research
Laboratories, Ltd. IVAX is committed to the cost-effective
development of proprietary
23
pharmaceuticals directed primarily toward indications having
relatively large patient populations or for which limited or
inadequate treatments are available. IVAX seeks to accelerate
product development and commercialization by in-licensing
compounds, especially after clinical testing has begun, and by
developing new dosage forms or new therapeutic indications for
existing products.
. Leveraging Proprietary Technology and Development Strengths. IVAX
intends to continue to leverage its proprietary technology and
development strengths, including its patented inhalation
technology and its expertise in developing and commercializing
respiratory products and experience in the development and
commercialization of oncology drugs to develop a significant
portfolio of proprietary, high value pharmaceutical products.
. Pursuing Complementary, Accretive or Strategic Acquisitions. IVAX
intends to pursue accretive or strategic business acquisitions or
ones that will complement its existing businesses and provide new
product and market opportunities, as well as leverage its
existing assets. In addition, IVAX will continue to actively
pursue strategic product acquisitions and other collaborative
arrangements that permit it to leverage its existing
infrastructure by adding sales from acquired products while
minimizing incremental costs.
. Strategically Expanding Sales and Distribution of IVAX'
Products. IVAX recently completed acquisitions of pharmaceutical
companies in Venezuela and Mexico and continues the expansion of
its Latin American operations. IVAX' future plans include (1)
acquiring additional manufacturing and distribution capabilities
in Europe and Latin America and (2) establishing additional joint
ventures and selectively establishing distribution channels for
its major products in Asia.
Pharmaceutical Business
IVAX has pharmaceutical manufacturing facilities located in Argentina,
China, the Czech Republic, England, Germany, Hungary, Ireland, Mexico, Puerto
Rico, the United States, Uruguay, Venezuela, and the Virgin Islands. Marketing
and/or research facilities are located in these same countries, and also in
Canada, France, India, Kazakhstan, Latvia, the Netherlands, Peru, Poland,
Russia, Sweden, Switzerland, the Slovak Republic, Taiwan, and the Ukraine. In
other countries, IVAX' products are marketed through distributors or joint
ventures. IVAX' pharmaceutical business has grown through the development and
acquisition of proprietary, brand-equivalent and over-the-counter
pharmaceutical products, the licensing of technology and products, the
licensing of technology and products from third parties, and the acquisition
of companies engaged in the pharmaceuticals business in various geographic
regions.
Proprietary and Branded Products
IVAX markets a number of proprietary and branded products treating a
variety of conditions through IVAX' subsidiaries throughout the world. These
products are marketed by IVAX' direct sales force to physicians, pharmacies,
hospitals, managed health care organizations and government agencies. These
products are sold primarily to wholesalers, retail pharmacies, distributors,
hospitals and physicians.
IVAX has a strong foundation in the oncology field based on IVAX'
proprietary anti-cancer drug PAXENE(R) (paclitaxel injection), which is
therapeutically equivalent to the Bristol-Myers Squibb product Taxol(R), the
largest selling anti-cancer drug in the world. In September 2000, the United
States Food and Drug Administration (FDA) approved IVAX' Abbreviated New Drug
Application (ANDA) for this product, which is marketed in the U.S. as
Onxol(TM).
IVAX also has substantial expertise in the development, manufacture and
marketing of respiratory drugs, primarily for asthma, in metered-dose inhaler
formulations. IVAX' subsidiary in the United Kingdom is
24
the third largest respiratory company in that market. At the core of IVAX'
respiratory franchise are advanced delivery systems, which include a patented
metered-dose inhaler called Easi-Breathe(R), and a unique new dry powder
inhaler, as well as conventional metered-dose inhalers.
Brand-Equivalent Products
In the United States, IVAX manufacturers and markets approximately 56
brand-equivalent prescription drugs in capsule or tablet forms in an aggregate
of approximately 123 dosage strengths. IVAX also distributes in the United
States approximately 282 additional generic prescription and over-the-counter
drugs and vitamin supplements, in various dosage forms, dosage strengths and
package sizes. IVAX is also a leading provider of brand-equivalent
pharmaceuticals in the United Kingdom. IVAX markets approximately 110 brand-
equivalent prescription and over-the-counter drugs, about half of which it
manufactures, in various dosage forms and dosage strengths, constituting an
aggregate of approximately 229 products. In addition, IVAX manufactures and
markets various "blow-fill-seal" pharmaceutical products, such as solutions
for injection or irrigation, and unit-dose vials for nebulization to treat
respiratory disorders.
25
The following table sets forth summary financial data for IVAX as of and
for the five-year period ended December 31, 2000 and for the quarters ended
March 31, 2001 and 2000. The financial data for each of the fiscal years have
been derived from IVAX' audited consolidated financial statements, and should
be read in conjunction with those statements which are not included herein.
Three Months
Year Ended December 31, Ended March 31,
----------------------------------------------------- ------------------
1996 1997 1998 1999 2000 2000 2001
---------- --------- -------- -------- ---------- -------- --------
(in thousands, except per Share data) (Unaudited)
Operating Data
Net revenues(1)......... $ 658,745 $ 594,286 $625,727 $656,482 $ 793,405 $183,258 $259,932
Gross profit(1)........ 161,969 114,304 219,736 278,515 383,502 88,085 136,208
Selling(1)............. 98,770 100,220 71,152 71,131 92,032 17,979 27,502
General &
administrative........ 111,122 116,185 88,434 85,092 84,900 24,175 23,721
Research and
development(1)........ 51,729 53,409 47,886 53,403 65,331 15,456 18,883
Amortization........... 4,594 3,760 3,673 3,121 9,042 1,967 3,593
Restructuring & asset
write-downs........... 69,073 38,088 12,222 (612) (4,535) -- --
Merger expenses........ 557 2,343 -- -- -- -- --
---------- --------- -------- -------- ---------- -------- --------
Operating income
(loss)................. (173,876) (199,701) (3,631) 66,380 136,732 28,508 62,509
Interest income........ 1,126 5,738 11,972 6,142 13,986 1,054 3,808
Interest expense....... (15,996) (14,685) (6,857) (5,556) (14,624) (2,042) (4,359)
Other income........... 6,623 53,366 32,777 19,513 17,497 4,822 12,028
Income taxes
(benefit)............. (52,488) 60,166 10,047 14,850 13,214 5,440 13,755
Minority interest...... (5,354) (4,086) 403 (2,085) (608) (236) (99)
---------- --------- -------- -------- ---------- -------- --------
Income (loss) from
continuing operations.. (134,989) (219,534) 24,617 69,544 139,769 26,666 60,132
Income (loss) from
discontinued
operations............. (23,690) (8,701) 48,904 585 -- -- --
Net income (loss)....... (160,752) (233,254) 71,594 70,722 131,044 20,195 60,132
Basic earnings (loss)
per common share(2):
Continuing operations.. (0.60) (0.96) 0.11 0.34 0.71 0.14 0.30
Discontinued
operations............ (0.10) (0.04) 0.22 -- -- -- --
Net earnings (loss).... (0.71) (1.02) 0.32 0.35 0.67 0.11 0.30
Diluted earnings (loss)
per common share(2):
Continuing operations.. (0.60) (0.96) 0.11 0.34 0.69 0.13 0.29
Discontinued
operations............ (0.10) (0.04) 0.22 -- -- -- --
Net earnings (loss).... (0.71) (1.02) 0.32 0.34 0.64 0.10 0.29
Weighted average number
of common shares
outstanding(2):
Basic.................. 226,779 227,804 223,342 201,885 196,276 192,205 199,255
Diluted................ 226,779 227,804 223,621 205,501 204,058 200,053 206,270
Cash dividends per
common Share........... $ 0.05 $ -- $ -- $ -- $ -- $ -- $ --
March 31, 2001
------------------
(unaudited)
Balance Sheet Data
Working capital (3)..... $ 415,927 $ 238,918 $269,511 $124,373 $ 438,490 $ 397,145
Total assets............ 1,333,648 790,736 778,015 634,514 1,068,186 1,221,189
Total long-term debt,
net of current
portion................ 442,819 94,193 77,776 93,473 253,755 253,616
Shareholders' equity.... 695,128 435,039 453,208 292,371 484,120 660,045
- --------
(1) Figures for 1999 and 1998 have been reclassified to conform to current
classifications.
(2) Figures have been retroactively restated to reflect the 5-for-4 stock
split effective May 18, 2001.
(3) Excludes net assets of discontinued operations.
Available Information. IVAX is subject to the information and reporting
requirements of the Exchange Act and in accordance therewith is required to
file electronically via the Commission's EDGAR System periodic reports, proxy
statements and other information with the Commission relating to its business,
financial condition and other matters. Certain information, as of particular
dates, concerning IVAX' business, principal physical
26
properties, capital structure, material pending legal proceedings, operating
results, financial condition, directors and officers (including their
remuneration and stock options granted to them), the principal holders of
IVAX' securities, any material interests of such persons in transactions with
IVAX and certain other matters is required to be disclosed in proxy statements
and annual reports distributed to IVAX' shareholders and filed with the
Commission. Such reports and other information may be inspected at the public
reference facilities maintained by the Commission at Judiciary Plaza, 450
Fifth Street, N.W., Washington D.C. 20549 and at the regional offices of the
Commission in New York (7 World Trade Center, New York, New York 10048) and
Chicago (500 West Madison Street, Chicago, Illinois 60661-5211). In addition,
you can inspect the reports, proxy statements and other information IVAX files
at the offices of the American Stock Exchange, Inc., 86 Trinity Place, New
York, New York 10006. The Commission also maintains a website at
http://www.sec.gov on which IVAX' filings are available.
Ownership of Shares and other transactions. (a) As of the date of this
U.S. Offer to Purchase, neither the Purchaser, IVAX nor, to the best of their
knowledge, any of the persons listed in Schedule I to this U.S. Offer to
Purchase or any affiliate or majority-owned subsidiary of the Purchaser, IVAX
or any of the persons listed in Schedule I hereto, beneficially owns or has
any right to acquire, directly or indirectly, any Shares (including Shares
represented by ADSs) and (b) except as set forth on Schedule II hereto,
neither the Purchaser, IVAX nor, to the best of their knowledge, any of the
persons or entities referred to above nor any director, executive officer or
subsidiary of any of the foregoing has effected any transaction in the Shares
(including Shares represented by ADSs) or ADSs during the past 60 days.
Except as otherwise described in this U.S. Offer to Purchase, neither
the Purchaser, IVAX nor, to the best of their knowledge, any of the persons
listed in Schedule I hereto, has any contract, arrangement, understanding or
relationship with any other person with respect to any securities of the
Company, including, but not limited to, any contract, arrangement,
understanding or relationship concerning the transfer or voting of such
securities, finder's fees, joint ventures, loan or option arrangements, puts
or calls, guarantees of loans, guarantees of profits, division of profits or
loss or the giving or withholding of proxies. Except as set forth in this U.S.
Offer to Purchase, since May 31, 1999, neither the Purchaser, IVAX nor, to the
best of their knowledge, any of the persons listed in Schedule I hereto, has
had any business relationship or transaction with the Company or any of its
executive officers, directors, or affiliates that is required to be reported
under the rules and regulations of the Commission applicable to the U.S.
Offer. Except as set forth in this U.S. Offer to Purchase, since May 31, 1999,
there have been no contacts, negotiations or transactions between the
Purchaser, IVAX or any of their respective subsidiaries or, to the best
knowledge of the Purchaser, IVAX or any of the persons listed in Schedule I
hereto, on the one hand, and the Company or its affiliates, on the other hand,
concerning a merger, consolidation or acquisition, tender offer or other
acquisition of securities, an election of directors or a sale or other
transfer of a material amount of assets.
Proceedings and Convictions. During the last five years, neither the
Purchaser, IVAX nor, to the best of their knowledge, any of the persons listed
on Schedule I hereto, (a) has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or (b) has been a party
to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, United States federal or state securities
laws or finding any violation with respect to such laws.
10. Source and Amount of Funds.
IVAX and/or its affiliates will provide the Purchaser with approximately
$395 million which will be used to purchase all the Shares and ADSs validly
tendered and not withdrawn in the Offers. The Offers are not conditioned upon
any financing arrangements. IVAX and/or its affiliates currently intend to
provide the necessary funds through cash on hand. As of May 15, 2001, IVAX had
approximately $868.1 million in cash and cash equivalents.
27
11. Background of the Offers; Past Contacts, Transactions or Negotiations
with the Company.
IVAX has considered the possible acquisition of the Company in connection
with its overall strategy to pursue acquisitions that broaden its global reach
or augment its product portfolios, including the acquisition of manufacturers
and distributors of pharmaceutical products in emerging market countries, such
as Chile. In late 2000, IVAX began studying in greater detail an acquisition
of a significant interest in the Company. IVAX approached the Principal
Shareholders regarding the possible acquisition of the Shares held by the
Principal Shareholders through a cash tender offer for all Shares (including
Shares represented by ADSs). After engaging in preliminary discussions, IVAX
determined not to proceed further with an acquisition of the Shares due to the
condition of the prevailing equity markets at the time. In March 2001,
representatives of the Principal Shareholders contacted IVAX regarding the
possible acquisition of the Shares held by the Principal Shareholders through
a tender offer for all Shares (including Shares represented by ADSs) in
exchange for shares of IVAX' common stock. During March and April 2001, IVAX
continued preliminary discussions with the Principal Shareholders regarding
the possible acquisition of the Shares held by the Principal Shareholders
through a tender offer for all Shares (including Shares represented by ADSs)
in exchange for shares of IVAX' common stock. On May 14, 2001, the parties
began to discuss the possibility of IVAX acquiring the Shares held by the
Principal Shareholders in a cash tender offer for all of the Shares. IVAX and
its representatives met with the Principal Shareholders and their
representatives during the week of May 14, 2001 to discuss the terms of the
acquisition of the Principal Shareholders' Shares and a cash tender offer for
all of the Shares. On May 18, 2001, IVAX and the Principal Shareholders
entered into the Agreement to Tender. On May 21, 2001, IVAX announced its
intention to make the Offers.
On May 31, 2001, the Purchaser commenced the Offers.
12. Purpose of the Offers; Plans for the Company; Other Agreements.
The purpose of the Offers is to enable IVAX to acquire control of, and
all of the equity interest in, the Company.
IVAX intends, as soon as practicable after consummation of the Offers, to
seek majority representation on the Company's Board of Directors. IVAX will
seek to elect a majority of its designees to the Company's Board of Directors
such that IVAX will control the Company's Board of Directors. In addition,
IVAX intends, as soon as practicable after consummation of the Offers, to call
a meeting of the Shareholders or take such other appropriate corporate action
in order to amend, to the extent permitted by applicable law, the Company's
dividend policy so as to reduce the percentage of net income that the Company
is obligated to pay as a cash dividend each year.
A new tender offer law in Chile was enacted on December 20, 2000. The law
requires any person, after acquiring control of 66 2/3% or more of the voting
power, to commence a subsequent tender offer for all remaining shares of the
company within 30 days following the acquisition of such control. If required
by Chilean law, the Purchaser intends to launch such a subsequent tender offer
in Chile, and if required by law, in the United States. Although the new law
is subject to different interpretations, IVAX understands that the provisions
of the new law pertaining to such an offer require that the price per Share in
such offer is no less than the price paid in the original tender offer. The
law also provides that if the acquiring person fails to commence a subsequent
tender offer, holders of remaining shares would be entitled to the statutory
appraisal rights.
In connection with the Offers, IVAX has reviewed, and will continue to
review, on the basis of publicly available information relating to the
Company, various possible business strategies that it might consider in the
event that it acquires majority control of the Company pursuant to the Offers.
In addition, if and to the extent that IVAX acquires control of the Company
pursuant to the Offers, IVAX intends to conduct a detailed review of the
Company and its assets, corporate structure, dividend policy, capitalization,
operations, properties, policies, management and personnel and, subject to
applicable regulatory rules and regulations, to consider and determine what,
if any, changes would be desirable in light of the circumstances which then
exist.
28
Except as otherwise discussed in this U.S. Offer to Purchase, neither
the Purchaser nor IVAX has any present plans or proposals that would result in
any extraordinary corporate transaction, such as a merger, reorganization,
liquidation, or sale or transfer of a material amount of assets of the Company
or any of its subsidiaries or any other material changes to the Company's
capitalization, dividend policy, capital structure, corporate structure or
business.
The Agreement to Tender. The Agreement to Tender is filed as an exhibit
to the Schedule TO filed with the Commission on the date the Offers are
commenced. The following summary describes the material terms of the Agreement
to Tender. You should read carefully the complete Agreement to Tender for its
terms and other information that may be important to you.
Commence Offers. In the Agreement to Tender, IVAX agreed to commence the
Offers within 21 days of the date of the Agreement to Tender so long as
certain conditions had been met. All of these conditions were either met or
waived.
Consummation of the Offers. IVAX agreed in the Agreement to Tender that
it would not, without the prior written consent of the Principal Shareholders,
impose any additional conditions to the Offers other than the conditions
described in Section 15 of this U.S. Offer to Purchase, change any conditions
to the Offers, or otherwise amend the Offers in any respect, which consent may
not be unreasonably delayed. However, IVAX need not obtain the prior consent
of the Principal Shareholders to impose additional conditions or change any
condition if such addition or change is imposed by any securities authority or
does not adversely affect the Shareholders. Pursuant to the Agreement to
Tender, IVAX has agreed that, no later than the day before the Shareholders
Meeting, it shall advise the Principal Shareholders as to whether it has
waived the condition set forth in paragraph (d) of Section 15. Additionally,
if Shares (including Shares represented by ADSs) representing at least the
Minimum Condition have been tendered immediately prior to the Shareholders
Meeting, then IVAX has agreed with the Principal Shareholders to waive those
conditions set forth in paragraphs (c), (d), (g) and (h) of Section 15. IVAX
has also agreed with the Principal Shareholders to waive any possible default
of a condition or failure to meet a condition that may have occurred or be
deemed to have occurred pursuant to any of the conditions, other than the
conditions set forth in paragraphs (c), (d), (g) and (h) of Section 15, as a
result of or with respect to any circumstance, event or incident occurring or
existing prior to the Shareholders Meeting that IVAX knew of or should have
known of at such time. IVAX' obligation with respect to the waivers referred
to above is conditioned on IVAX receiving a certificate from a representative
of each of the Principal Shareholders that, to such person's knowledge, after
due inquiry, no event or incident has occurred that would cause a default of
any of these conditions. If IVAX does not waive these conditions prior to the
Shareholders Meeting, then the Principal Shareholders are not required to vote
in favor of the Bylaw Amendments.
Call of the Company Shareholders Meeting; Voting. The Principal
Shareholders have agreed to exercise their right to demand that the Company's
Board of Directors call a Shareholders Meeting to be held on the earliest
possible date consistent with applicable notice requirements imposed by law,
or such other date as IVAX and the Principal Shareholders may agree, to
consider and take action on the Bylaw Amendments. Pursuant to the Agreement to
Tender, in no event can the Shareholders Meeting be held earlier than nine
calendar days or later than five business days prior to the Expiration Date.
Provided that the conditions specified in the preceding paragraph have been
waived, the Principal Shareholders have also agreed to vote the Shares held by
them in favor of the Bylaw Amendments.
Tender into the Offers. The Principal Shareholders have agreed to tender
their ADSs into the U.S. Offer and to tender their Shares into the Chilean
Offer.
Termination of Agreement to Tender. The Agreement to Tender will
terminate upon the purchase of the Principal Shareholders' Shares and ADSs by
the Purchaser and may be terminated by mutual written consent of the Principal
Shareholders and IVAX, or by either the Principal Shareholders or IVAX if (a)
there shall be in effect any law that prohibits the consummation of the Offers
or if consummation of the Offers would violate any
29
nonappealable final order, decree or judgment of any court or governmental
entity having competent jurisdiction, (b) the Bylaw Amendments are not
approved at the Shareholders Meeting, or (c) the Offers expire or terminate
without the purchase of any Shares. The Agreement to Tender may be terminated
by the Principal Shareholders if IVAX (i) has not commenced the Offers within
21 days following the execution of the Agreement to Tender unless such failure
is a result of the Principal Shareholders' breach of a material obligation or
agreement under the Agreement to Tender or (ii) has breached any of its
material obligations or agreements under the Agreement to Tender and such
breach is incapable of being cured or is not cured within ten days following
written notice. The Agreement to Tender may be terminated by IVAX if the
Principal Shareholders have (A) breached their agreement to convene a
Shareholders Meeting and vote in favor of the Bylaw Amendments or (B) breached
any of their material obligations or agreements under the Agreement to Tender,
other than those described in (A) above and such breach is incapable of being
cured or is not cured within ten days following written notice.
Alternative Transaction. Pursuant to the Agreement to Tender, in the
event that a Third Party (as hereinafter defined) tender offer to purchase at
least 15% of the Shares, or any other Alternative Transaction (as hereinafter
defined) is commenced by any party that is not an affiliate of the Principal
Shareholders or the Company (a "Competing Offer"), and the aggregate price per
Share being offered in such Third Party tender offer or Alternative
Transaction is greater than the price per Share or ADSs being offered by IVAX
in the U.S. Offer (each, a "Higher Competing Offer"), then the Principal
Shareholders may request, no earlier than three business days prior to the
expiration of the Higher Competing Offer, that IVAX consent to the Principal
Shareholders withdrawing their Shares from the Offers and tendering their
shares into the Higher Competing Offers. IVAX shall grant or deny such request
within 24 hours of the date the Principal Shareholders make such request. If
IVAX agrees to allow the Principal Shareholders to withdraw their shares from
the Offers and tender their shares into the Higher Competing Offers, the
Principal Shareholders will pay to IVAX the difference between the aggregate
amount received by the Principal Shareholders in the Higher Competing Offers
and the aggregate amount the Principal Shareholders would have received in the
Offers (the "Release Amount"). If IVAX does not consent to the Principal
Shareholders withdrawing their shares from the Offers and tendering their
shares into the Higher Competing Offers, IVAX will be obligated to purchase
the Principal Shareholders' Shares at a price per Share equal to the offer
price per Share or ADS being offered by IVAX in the U.S. Offer either pursuant
to the terms of the Offers, if the Offers are consummated, or if the Offers
are not consummated, in a private transaction, if permitted by applicable law.
"Alternative Transaction" means any transaction or series of transactions
pursuant to which (a) any person (or group of persons), including either of
the Principal Shareholders, their subsidiaries and affiliates, other than the
Company and its wholly-owned subsidiaries, IVAX and its subsidiaries (a "Third
Party") acquires or would acquire, directly or indirectly, beneficial
ownership (as defined in Rule 13d-3 under the Exchange Act) of more than 15%
of the Shares, whether from the Principal Shareholders, the Company or
otherwise; or (b) any Third Party acquires or would acquire, directly or
indirectly, assets of the Company (other than in the ordinary course of
business) or, control of assets of the Company or its subsidiaries in any case
having a book value of 10% or more of the Company's total consolidated assets,
or for consideration equal to 10% or more of the fair market value of all
Shares on the date of the Agreement to Tender.
In the event that the aggregate consideration per share being offered in
the Third Party tender offer or Alternative Transaction (an "Equal Competing
Offer") is equal to or less than the price per Share or ADS being offered by
IVAX in the U.S. Offer and the Principal Shareholders have a reasonable basis
to believe that there is an existing default of any of the conditions to close
the Offers described in Section 15 of this U.S. Offer to Purchase, then the
Principal Shareholders may request no earlier than two business days prior to
the expiration of the Equal Competing Offer that IVAX consent to the Principal
Shareholders withdrawing their Shares from the Offers and tendering their
Shares into the Equal Competing Offer. IVAX shall grant or deny such request
within 24 hours of the date the Principal Shareholders make such request. If
IVAX agrees to allow the Principal Shareholders to withdraw their Shares from
the Offers and tender their Shares into the Equal Competing Offer, the
Principal Shareholders will pay to IVAX the Release Amount, if any.
No Solicitation. The Principal Shareholders agreed to immediately cease
and terminate all existing discussions and negotiations, if any, with any
other persons with respect to any Alternative Transaction. In addition, the
Principal Shareholders have agreed in the Agreement to Tender not directly or
indirectly to
30
(a) solicit, initiate or encourage or take any other action to facilitate any
inquiries or the making of any proposal relating to an Alternative
Transaction; (b) participate in any discussions or negotiations regarding an
Alternative Transaction; (c) assist anyone regarding an Alternative
Transaction; (d) call or assist anyone in calling a meeting of the
Shareholders of the Company regarding an Alternative Transaction; and (e) take
any action that would be inconsistent with the consummation of the Offers.
13. Effect of the Offers on the Market for the Shares and ADSs;
Registration of Shares under the Exchange Act; Margin Regulations.
According to Chilean law, the SVS may cancel the registration of any
security of the Company in the Securities Registry if the security does not
comply with the requirements for its registration. Subject to applicable laws
and rules of the Chilean stock exchanges, the Purchaser intends to cause the
Company to delist the Shares from the Chilean stock exchanges.
Effects on Market for Shares and ADSs. The purchase of Shares and ADSs
pursuant to the U.S. Offer will reduce substantially the number of Shares and
ADSs that might otherwise trade publicly and could reduce the number of
holders of Shares and ADSs. While a reduction in publicly traded Shares and
ADSs could adversely affect liquidity and market value, the Purchasers cannot
predict, with any certainty, whether this reduction will have an adverse or
beneficial effect on the market price for, or marketability of, the Shares and
ADSs.
The ADSs are listed on the NYSE. Depending on the number of ADSs
purchased pursuant to the U.S. Offer and the aggregate market value of any
ADSs not purchased pursuant to the U.S. Offer, the ADSs may no longer meet the
requirements for continued listing on the NYSE. The NYSE does not currently
have a formal policy with respect to the delisting of ADSs. Subject to
applicable laws and NYSE rules, the Purchaser intends to cause the Company to
delist the ADSs from the NYSE following the consummation of the Offers.
Margin Regulations. The ADSs are currently "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"), which has the effect, among other things, of
allowing brokers to extend credit on the collateral of such securities.
Depending upon factors such as the number of the aggregate market value of the
publicly held ADSs, the ADSs might no longer constitute "margin securities"
for the purposes of the Federal Reserve Board's margin regulations and,
therefore, could no longer be used as collateral for loans made by brokers.
Registration of Shares Under the Exchange Act. The Shares are currently
registered under the Exchange Act. Such registration may be terminated upon
application by the Company to the Commission if the ADSs are not listed on a
national securities exchange and there are fewer than 300 record holders of
the Shares of ADSs resident in the United States. Termination of the
registration of the Shares under the Exchange Act would substantially reduce
the information required to be furnished by the Company to holders of ADSs and
to the Commission and would make certain of the provisions of the Exchange
Act, such as the requirements of Rule 13e-3 under the Exchange Act with
respect to "going private" transactions, no longer applicable to the ADSs.
Furthermore, "affiliates" of the Company and persons holding "restricted
securities" of the Company may be deprived of the ability to dispose of such
securities pursuant to Rule 144 promulgated under the Securities Act. If
registration of the Shares under the Exchange Act were terminated, the ADSs
would no longer be "margin securities" or eligible for listing or Nasdaq
reporting. The Purchaser intends to seek to cause the Company to apply for
termination of registration of the Shares and ADSs under the Exchange Act as
soon as possible after completion of the Offers if the requirements for such
termination are met.
14. Extension of Tender Period; Termination; Amendment.
The Purchaser reserves the right, at any time or from time to time, in
its sole discretion and regardless of whether or not any of the conditions
specified in Section 15 shall have been satisfied, to extend for any reason
the period of time during which the U.S. Offer remains open and to amend the
U.S. Offer in any respect by
31
giving oral or written notice of such extension or amendment to the Receiving
Agent and followed as promptly as practicable by public announcement thereof.
During any such extension, all Shares and ADSs previously tendered and not
withdrawn will remain subject to the U.S. Offer, subject to the rights of a
tendering holder to withdraw its Shares and ADSs in accordance with the
procedures set forth in Sections 3 and 4. There can be no assurance that the
Purchaser will exercise its right to extend or amend the U.S. Offer.
Pursuant to Rule 14d-11 under the Exchange Act, the Purchaser may,
subject to certain conditions, elect to provide a subsequent offering period
of three to twenty business days in length following the Expiration Date (the
"Subsequent Offering Period"). A Subsequent Offering Period would be an
additional period of time, following the Expiration Date and the purchase of
Shares in the U.S. Offer, during which shareholders may tender Shares and ADSs
not tendered in the U.S. Offer. A Subsequent Offering Period, if one is
included, is not an extension of the U.S. Offer, which already will have been
completed.
The Purchaser does not currently intend to include a Subsequent Offering
Period in the U.S. Offer, although it reserves the right to do so in its sole
discretion. Under the Exchange Act, no withdrawal rights apply to Shares and
ADSs tendered during the Subsequent Offering Period and no withdrawal rights
apply during the Subsequent Offering Period with respect to Shares and ADSs
tendered in the U.S. Offer and accepted for payment. If a Subsequent Offering
Period is included, the Purchaser will promptly purchase and pay for any
Shares and ADSs tendered at the same price paid in the U.S. Offer. If the
Purchaser elects to provide for a Subsequent Offering Period, it will make an
announcement to that effect and disseminate the information concerning the
Subsequent Offering Period.
If the Purchaser decreases the percentage of Shares (including Shares
represented by ADSs) being sought or increases or decreases the consideration
to be paid for Shares and ADSs pursuant to the U.S. Offer and the U.S. Offer
is scheduled to expire at any time before the expiration of a period of ten
business days from, and including, the date that notice of such increase or
decrease is first published, sent or given in the manner specified below, the
U.S. Offer will be extended until the expiration of such period of ten
business days. The Purchaser currently does not intend to decrease the
percentage of Shares (including Shares represented by ADSs) to be purchased in
the U.S. Offer. If the Purchaser makes a material change in the terms of the
U.S. Offer (other than a change in price or percentage of securities sought)
or in the information concerning the U.S. Offer, or waives a material
condition of the U.S. Offer, the Purchaser will extend the U.S. Offer, if
required by applicable law, for a period sufficient to allow Shareholders to
consider the amended terms of the U.S. Offer. In a published release, the
Commission has stated that in its view an offer must remain open for a minimum
period of time following a material change in the terms of such offer and that
the waiver of a condition such as the minimum tender condition near or at the
end of a tender offer is a material change in the terms of an offer. The
release states that an offer should remain open for a minimum of five business
days from the date the material change is first published, sent or given to
security holders, and that if material changes are made with respect to
information that approaches the significance of price and share levels, a
minimum of 10 business days may be required to allow adequate dissemination
and investor response. The term "business day" shall mean any day other than
Saturday, Sunday or a U.S. federal holiday and shall consist of the time
period from 12:01 a.m. through 12:00 midnight, New York City time.
The Purchaser also reserves the right, in its sole discretion, in the
event any of the conditions specified in Section 15 shall not have been
satisfied and so long as Shares and/or ADSs have not theretofore been accepted
for payment, to delay (except as otherwise required by applicable law)
acceptance for payment of or payment for Shares and ADSs or to terminate the
U.S. Offer and not accept for payment or pay for Shares and ADSs.
If the Purchaser extends the period of time during which the U.S. Offer
is open, is delayed in accepting for payment or paying for Shares and/or ADSs
or is unable to accept for payment or pay for Shares and/or ADSs pursuant to
the U.S. Offer for any reason, then, without prejudice to the Purchaser's
rights under the U.S. Offer, the Receiving Agent may, on behalf of the
Purchaser, retain all Shares and ADSs, respectively, tendered, and such Shares
and ADSs may not be withdrawn except as otherwise provided in Section 5. The
reservation by the
32
Purchaser of the right to delay acceptance for payment of or payment for
Shares and ADSs is subject to applicable law, which requires that the
Purchaser pay the consideration offered or return the Shares and ADSs
deposited by or on behalf of Shareholders promptly after the termination or
withdrawal of the U.S. Offer.
Any extension, termination or amendment of the U.S. Offer will be
followed as promptly as practicable by a public announcement thereof. Without
limiting the manner in which the Purchaser may choose to make any public
announcement, the Purchaser will have no obligation (except as otherwise
required by applicable law) to publish, advertise or otherwise communicate any
such public announcement other than by making a press release to the Dow Jones
News Service. In the case of an extension of the U.S. Offer, the Purchaser
will make a public announcement of such extension no later than 9:00 a.m., New
York City time, on the next business day after the previously scheduled
Expiration Date.
15. Certain Conditions of the U.S. Offer.
Subject to any applicable rules and regulations of the Commission,
including Rule 14e-1(c) under the Exchange Act (relating to the Purchaser's
obligation to pay for or return tendered securities promptly after termination
or withdrawal of the U.S. Offer), the Purchaser may terminate or amend the
U.S. Offer and may postpone the acceptance of any payment for the Shares and
ADSs as provided in Section 14 if prior to the Expiration Date any of the
following conditions have not been satisfied:
(a) The Bylaw Amendments shall have been approved and shall have become
legalized and effective under Chilean law.
(b) There shall not have been pending any action, proceeding, claim by
any person, domestic or foreign, which has a reasonable likelihood
of success, or by any government, governmental authority or other
regulatory or administrative agency or commission, domestic, foreign
or supranational, before any court, governmental, regulatory or
administrative agency or commission, authority or tribunal, domestic
or foreign, or any statute, rule, regulation, order, judgment,
decree or injunction enacted, promulgated, entered, enforced or
deemed to become applicable to the Offers, or, any other action
taken, which (i) impedes the completion of the Offers, (ii) the
acquisition of any significant portion of or all of the Shares,
(iii) materially modifies the terms and conditions of the Offers,
(including without limitation making it more expensive or onerous),
(iv) restricts the completion of the Offers, or (v) makes the Offers
illegal.
(c) No change, event or development shall have occurred which has had or
would reasonably be expected to cause a material adverse effect on
the condition (financial or otherwise), business, properties,
assets, liabilities or results of operation of the Company and its
subsidiaries, taken as a whole.
(d) There shall not have been a breach of Section 2.7 of the Agreement
to Tender and, as a result of the information provided pursuant to
Section 2.7, IVAX shall not have become aware of any facts or
circumstances that indicate (i) that the Company's filings with the
Commission contained, at the time of their respective filing, untrue
statements of material facts or omitted to state material facts
necessary to make the statements made therein, in light of the
circumstances in which they were made, not misleading and such
untrue statements or omissions would reasonably be expected to cause
a material adverse effect on the condition (financial or otherwise),
business, properties, assets, liabilities or results of operation of
the Company and its subsidiaries, taken as a whole, (ii) that any
event or development shall have occurred which would reasonably be
expected to cause a material adverse effect on the condition
(financial or otherwise), business, properties, assets, liabilities
or results of operation of the Company and its subsidiaries, taken
as a whole from that reflected in the Company's Commission filings
or (iii) that the Company shall have changed its business or
accounting practices from those in place on December 31, 1999 such
that the Company's publicly reported financial statements as of and
for the twelve month period ended December 31, 2000 or as of and for
the three month period ended March 31, 2001 were materially
misleading.
33
(e) There shall not have occurred:
. any general suspension of trading in, or limitation on prices for,
securities on any United States national securities exchange or
Chilean securities exchange, other than the imposition by the
NYSE, the Nasdaq Stock Market, the Santiago Stock Exchange, the
Valparaiso Stock Exchange, the Electronic Stock Exchange of Chile
or the American Stock Exchange of daily suspensions per their
respective rules or policies;
. a declaration of a banking moratorium or any suspension of payment
in respect of banks in the United States, Argentina or Chile,
whether mandatory or not mandatory;
. commencement of a war, armed hostilities, military coup d'etat,
collapse of the government or other national or international
crisis involving Argentina, Chile or the United States or acts of
terrorism which materially disrupt the normal operations of (i)
the Company, (ii) Argentina, or (iii) Chile;
. a material adverse change or development involving a change in
exchange controls, currency exchange rates or any suspension of,
or limitation on, the markets for currency in Argentina, Chile or
the United States;
. any devaluation of the Argentine peso in excess of 15% as
published by the Central Bank of Argentina or as reported on any
generally quoted market;
. any devaluation of the Chilean peso in excess of 10% as published
by the Central Bank of Chile or as reported on any generally
quoted market;
. any material change in taxation in Chile, including withholding,
affecting the Shares; or
. any change or development in foreign investment regulation in
Chile, the effect of which is to make it, in IVAX' reasonable
judgment, impracticable to proceed with the Offers on the terms
and in the manner contemplated.
(f) The Company or any of its subsidiaries shall not have, at any time
after the commencement of the Offers:
. issued, distributed, pledged, sold or authorized, proposed or
announced the issuance of or sale, distribution or pledge to any
person, other than to the Company or a subsidiary of:
. any shares of its capital stock;
. the capital stock of any of its subsidiaries;
. securities convertible into any such capital stock;
. any rights, warrants or options to acquire any such securities
or any other securities of the Company or its Subsidiaries; or
. any other securities in respect of, in lieu of, or in
substitution for, the Company shares outstanding on March 31,
2001;
. declared, paid or proposed to declare or pay any dividend or
distribution on the Shares after the date of commencement of the
Offers;
. issued, authorized, recommended or proposed the issuance or
payment of any other distribution in respect of the Shares,
whether payable in cash, securities or other property;
. altered any term of any outstanding security;
34
. issued, sold or authorized or announced or proposed the issuance
of or sale to any person (other than pursuant to existing credit
arrangements) of:
. any debt securities;
. any securities convertible into or exchangeable for debt
securities; or
. any rights, warrants or options entitling the holder thereof to
purchase or otherwise acquire any debt securities;
. split, combined or otherwise changed, or authorized or proposed
the split, combination or other change of the Shares or the
Company's or its subsidiaries' capitalization;
. authorized, recommended, proposed or entered into or publicly
announced its intent to enter into any merger, consolidation,
liquidation, dissolution, business combination, joint venture,
strategic alliance or similar arrangement involving any material
assets, acquisition or disposition of a material amount of assets
or securities, any material change in its capitalization, or any
agreement contemplating any of the foregoing or any comparable
event not in the ordinary course of business;
. amended or proposed or authorized any amendments to the Company's
Bylaws or any other organizational documents, other than the Bylaw
Amendments; or
. agreed in writing or otherwise to take any of the foregoing
actions.
(g) At least 67% of the Shares, including any Shares represented by ADSs
shall have been tendered into the Offers at the time the votes are
cast at the Shareholders Meeting.
(h) IVAX shall have been granted the necessary foreign investment
approvals to be granted under DL 600 of Chile.
(i) The Company shall not have:
. entered into or invested in a line of business different from
those in which the Company or its subsidiaries is engaged as of
the commencement of the Offers in an amount exceeding in the
aggregate 5% of the Company's consolidated assets at the time of
the action;
. commenced operations in a country in which the Company or its
subsidiaries is not operating on the date of the commencement of
the Offers with a direct or indirect investment in cash or other
assets exceeding $10 million in the aggregate;
. disposed of, or created liens on, other than pursuant to existing
credit facilities, assets of the Company or its subsidiaries with
a book value of more than $20 million in the aggregate;
. acquired assets, excluding raw materials or inventory purchased in
the ordinary course, for consideration exceeding $20 million in
the aggregate;
. increased the consolidated financial debt of the Company more than
$20 million in the aggregate, including indebtedness for working
capital;
. voluntarily or involuntarily withdrawn from the market any of the
Company's products that generated in excess of 5% of the net
revenues of the Company during the fiscal year ended December 31,
2000;
. voluntarily or involuntarily terminated or modified, in any
material adverse manner, an agreement or agreements that generated
revenues of more than $20 million in the aggregate in the 12
months ended on March 31, 2001;
. voluntarily or involuntarily terminated a relationship with a
supplier of any of the Company's products that generated in excess
of 5% of the net revenues of the Company during its last fiscal
year, which supplier is not promptly replaced;
35
. except in the ordinary course consistent with past practice,
materially increased the salary, paid any bonus or severance of
any employee or entered into severance, change of control or long
term employment agreements with any employee or any employment
agreements with any newly hired senior managers;
. entered into an agreement with an affiliated party which is not in
the ordinary course of business consistent with past practice and
is not terminable within 30 days without further liability;
. ceased to maintain insurance coverage substantially equivalent to
the coverage in place as of the date of the commencement of the
Offers;
. taken any action to cause the Company to have a negative working
capital on the business day prior to the Shareholders Meeting or
on the business day prior to the Expiration Date;
. ceased operation in Chile, Peru or Argentina;
. made a material change in the Company's accounting practices
(other than as required by U.S. or Chilean GAAP) or regulatory
compliance procedures;
. waived, released, assigned, settled or compromised any claims or
litigation involving amounts or other rights or assets in excess
over $5 million; or
. agreed to do any of the foregoing.
(j) Subsequent to the date of the Shareholders Meeting, any event or
incident has occurred, or a claim made, which has a reasonable
likelihood of success, that (i) would reasonably be expected to
reduce the Company's revenues or net income by more than 10% in the
12 month period ending on March 31, 2002 as compared to the 12 month
period ending on March 31, 2001, (ii) increased, or would reasonably
be expected to increase, the liabilities, contingent or otherwise by
$20 million in the aggregate, or (iii) destroyed or otherwise
impaired, or would reasonably be expected to impair, tangible assets
(other than as covered by insurance) or intangible assets by 15%.
(k) The Company shall not have directly or indirectly paid, expended or
accrued investment banking, legal, accounting, professional, or
other advisory fees and costs of any nature in excess of 1.1% of the
aggregate price offered by the Purchaser in the Offers (assuming
purchase of all the Shares) reasonably related to the Offers, or the
Agreement to Tender or the transactions related thereto, either on
behalf of itself or any of the Principal Shareholders or any
affiliate thereof; provided, however, that this condition shall be
inapplicable in case of any Competing Offer.
The foregoing conditions (other than the Bylaw Amendments Condition) are
for the sole benefit of the Purchaser and IVAX and may be asserted by the
Purchaser or IVAX in their sole discretion, regardless of the circumstances
(including any action or omission by the Purchaser or IVAX) giving rise to any
such conditions or may be waived by the Purchaser or IVAX in their sole
discretion in whole or in part at any time or from time to time. The failure
by the Purchaser or IVAX at any time to exercise any of the foregoing rights
will not be deemed a waiver of any such right and each such right will be
deemed an ongoing right which may be asserted any time and from time to time.
Any determination by the Purchaser or IVAX concerning any condition or event
described in this Section 15 will be final and binding upon all parties.
IVAX agreed in the Agreement to Tender that it would not, without the
prior written consent of the Principal Shareholders, which consent may not be
unreasonably delayed, impose any additional conditions to the Offers other
that the conditions described in Section 15 of this U.S. Offer to Purchase,
change any conditions to the Offers, or otherwise amend the Offers in any
respect. However, IVAX need not obtain the prior consent of the Principal
Shareholders to impose additional conditions or change any condition if such
addition or change is imposed by any securities authority or does not
adversely affect the Shareholders.
36
Pursuant to the Agreement to Tender, IVAX has agreed that, no later than
the day before the Shareholders Meeting, it shall advise the Principal
Shareholders as to whether it has waived the condition set forth in paragraph
(d) of Section 15. Additionally, if Shares (including Shares represented by
ADSs) representing at least the Minimum Condition have been tendered
immediately prior to the Shareholders Meeting, then IVAX has agreed with the
Principal Shareholders to waive those conditions set forth in paragraphs (c),
(d), (g) and (h) above. IVAX has also agreed with the Principal Shareholders
to waive any possible default of a condition or failure to meet a condition
that may have occurred or be deemed to have occurred pursuant to any of the
conditions, other than the conditions set forth in paragraphs (c), (d), (g)
and (h) above, as a result of or with respect to any circumstance, event or
incident occurring or existing prior to the Shareholders Meeting that IVAX
knew or should have known at such time. IVAX' obligation with respect to the
waivers referred to above is conditioned on IVAX receiving a certificate from
a representative of each of the Principal Shareholders that, to such person's
knowledge, after due inquiry, no event or incident has occurred that would
cause a default of any of these conditions. If IVAX waives such conditions,
IVAX will make an announcement to that effect and disseminate the information
concerning the waiver no later than five business days before the Expiration
Date. If IVAX does not waive these conditions prior to the Shareholders
Meeting, then the Principal Shareholders are not required to vote in favor of
the Bylaw Amendments.
16. Certain Legal Matters; Regulatory Approvals.
General. Based on its examination of publicly available information
filed by the Company with the Commission and other publicly available
information concerning the Company, neither the Purchaser or IVAX is aware of
(a) any governmental license or regulatory permit that appears to be material
to the Company's business that might be adversely affected by the Purchaser's
acquisition of Shares and/or ADSs as contemplated herein, (b) any approval or
other action by any government or governmental administrative or regulatory
authority or agency, domestic or foreign, that would be required for the
acquisition or ownership of Shares and/or ADSs by the Purchaser as
contemplated herein or (c) any approval or other action by any government or
governmental administrative regulatory authority or agency, domestic or
foreign, or any consent, waiver or other approval that would be required as a
result of or in connection with the Offers, including but not limited to, any
consents or other approvals under any licenses, concessions, permits and
agreements to which the Company, the Purchaser or IVAX or any of their
respective subsidiaries or affiliates is a party. Should any such approval or
other action be required, the Purchaser and IVAX currently contemplate that
such approval or other action will be sought. The Purchaser and IVAX are
unable to predict whether they may determine that the Purchaser is required to
delay the acceptance for payment of or payment for Shares and/or ADSs tendered
pursuant to the U.S. Offer pending the outcome of any such matter. There can
be no assurance that any such approval or other action, if needed, would be
obtained or would be obtained without substantial conditions or that if such
approvals were not obtained or such other actions were not taken adverse
consequences might not result to the Company's business or certain parts of
the Company's business might not have to be disposed of, any of which could
cause the Purchaser to elect to terminate the U.S. Offer without the purchase
of Shares and/or ADSs thereunder. The Purchaser's obligation under the U.S.
Offer to accept for payment and pay for Shares and/or ADSs is subject to
certain conditions. See Section 15.
Chilean Corporate Law.
Should IVAX acquire control of 66 2/3% of the total number of Shares
outstanding, IVAX would be able to approve the following actions: (a)
transformation, spin-off or merger of the Company; (b) amendment to the term
or duration of the Company or its early termination; (c) change of the
domicile of the Company; (d) the increase or reduction of its equity capital;
(e) approval and valuation of capital contributions made in property other
than cash; (f) amendment to those matters to be decided at a meeting of
Shareholders; (g) reduction of the number of members of the Board of Directors
of the Company and limits on the powers of the Board of Directors; (h) the
transfer of 50% or more of the Company's assets; the approval or amendment of
any business plan that includes transfer of assets for an amount higher than
the mentioned 50%; (i) the manner upon which the Company's profits will be
distributed; (j) the creation of guarantees or liens in an amount in excess of
50% of the Company's assets guaranteeing third parties' obligations other than
of subsidiaries (in which case the
37
decision by the Board of Directors will suffice); (k) the redemption of Shares
issued by the Company under certain circumstances; (l) the decision whether to
make private a public corporation; (m) the approval of related party
transactions under certain circumstances; (n) the curing of technical defects
in the constitutive documents of the Company or any amendment thereto; and (o)
others provided in the Bylaws.
Chilean company law provides for statutory appraisal rights for minority
Shareholders where holders of at least 66 2/3% of the shares make certain of
the fundamental changes set forth above. Dissident shareholders have 30 days
from the date of the meeting at which a fundamental change is approved to
notify the company of their dissent. The board of directors of the company has
an additional 30 days to call another meeting of the shareholders to consider
the revocation of the resolution that triggered the appraisal right. If the
board of directors does not call a second meeting of the shareholders or the
resolution is not revoked at such meeting, all dissenting shareholders that
previously notified the company have the right to compel the company to
purchase their shares in the company. Such purchases are made within 60 days
of the date on which the resolution triggering appraisal rights is approved,
at a price determined from the weighted average trading price on stock
exchanges in Chile during the preceding two months.
In accordance with Article 12 of the Chilean Securities Act, IVAX must
report the results of the Offers to the SVS and the relevant Chilean stock
exchanges within two trading days of the date on which IVAX acquires more than
10% of the Shares (including ADSs) pursuant to the Offer. In addition, the
Company must give notice of the acquisition of a majority of the ownership
interests of the Company within two trading days after the first day of the
month following the month in which the purchases under the Offers are made.
IVAX intends to take, or cause to be taken, all steps necessary to comply with
Article 12 of the Chilean Securities Act.
Antitrust and Regulatory Laws.
Under the United States Hart-Scott-Rodino Antitrust Improvements Act of
1976 (the "HSR Act"), certain acquisitions may not be consummated unless
certain information has been furnished to the Federal Trade Commission and the
Antitrust Division of the Department of Justice and certain waiting period
requirements have been satisfied. Based upon information concerning the
Company that is publicly available, the Purchaser believes that the HSR Act is
not applicable to the purchase of the Shares and/or the ADSs pursuant to the
Offers and that such purchase will not violate the antitrust laws.
There are no requirements under Chilean law that the Chilean Antitrust
Authority (the "CAA") be notified of the Offers. The CAA does, however, have
broad authority to investigate any intended transaction that the CAA
determines is likely to cause an adverse effect on, or lessen, competition.
Although it is not anticipated that the CAA will investigate the Offers, no
assurance can be given that the CAA will not determine that the Offers are
anticompetitive and subject to the scrutiny of the CAA.
Based upon the Company's revenues in Argentina, IVAX does not believe
that approval under Argentina antitrust rules is necessary in order to
consummate the Offers.
Other.
Based upon the Purchaser and IVAX' examination of publicly available
information concerning the Company, it appears that the Company and its
subsidiaries own property and conduct business in a number of foreign
countries in addition to those described above. In connection with the
acquisition of Shares and/or ADSs pursuant to the Offers, the laws of certain
of those foreign countries may require the filing of information with, or the
obtaining of the approval of, governmental authorities therein. After
commencement of the Offers, the Purchaser and IVAX will seek further
information regarding the applicability of any such laws and currently intends
to take such action as they may require, but no assurance can be given that
such approvals will be obtained. If any action is taken prior to completion of
the U.S. Offer by any such government or governmental authority, the Purchaser
may not be obligated to accept for payment or pay for any tendered Shares. See
Section 15.
17. Fees and Expenses.
Except as set forth below, neither the Purchaser nor IVAX will pay any
fees or commissions to any broker, dealer or other person for soliciting
tenders of Shares and/or ADSs pursuant to the U.S. Offer.
38
Merrill Lynch & Co. and UBS Warburg are acting as Dealer Managers in
connection with the U.S. Offer and as financial advisors to the Purchaser and
IVAX in connection with the proposed acquisition of a controlling interest in
the Company. Merrill Lynch & Co. and UBS Warburg will receive customary
compensation for acting in the foregoing capacities. The Purchaser and IVAX
also have agreed to reimburse Merrill Lynch & Co. and UBS Warburg for their
out-of-pocket expenses, including the fees and expenses of legal counsel and
other advisors, incurred in connection with their engagement, and to indemnify
Merrill Lynch & Co. and UBS Warburg and certain related persons against
certain liabilities and expenses in connection with its engagement, including
certain liabilities under the federal securities laws. In the ordinary course
of business, Merrill Lynch & Co., UBS Warburg and their affiliates may
actively trade the debt and equity securities of the Company for their own
account and for the accounts of customers, and accordingly, may at any time
hold a long or short position in such securities.
The Purchaser has retained The Bank of New York to act as the Receiving
Agent in connection with the U.S. Offer. The Receiving Agent has not been
retained to make solicitations or recommendations in its role as receiving
agent. The Receiving Agent will receive reasonable and customary compensation
for its services, will be reimbursed for certain reasonable out-of-pocket
expenses and will be indemnified against certain liabilities in connection
therewith, including certain liabilities under the U.S. Federal securities
laws.
The Purchaser has retained D.F. King & Co., Inc. to act as the
Information Agent in connection with the U.S. Offer. The Information Agent may
contact holders of Shares and/or ADSs by mail, telephone, telex, telegraph and
personal interviews and may request brokers, dealers and other nominee
Shareholders to forward materials relating to the U.S. Offer to beneficial
owners. The Information Agent will receive reasonable and customary
compensation for its services, will be reimbursed for certain reasonable out-
of-pocket expenses and will be indemnified against certain liabilities in
connection therewith, including certain liabilities under the U.S. Federal
securities laws.
18. Miscellaneous.
The U.S. Offer is not being made to, nor will tenders be accepted from
or on behalf of, holders of Shares or ADSs in any jurisdiction in which the
making of the U.S. Offer or acceptance thereof would not be in compliance with
the laws of such jurisdiction. In those jurisdictions where it is required
that the U.S. Offer be made by a licensed broker or dealer, the U.S. Offer
shall be deemed to be made on behalf of the Purchaser by the Dealer Managers
or one or more registered brokers or dealers licensed under the laws of such
jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF THE PURCHASER NOT CONTAINED IN THIS U.S. OFFER TO
PURCHASE OR IN THE FORM OF ACCEPTANCE, ADS LETTER OF TRANSMITTAL OR ADS NOTICE
OF GUARANTEED DELIVERY AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
IVAX has filed with the Commission a Tender Offer Statement on Schedule
TO, together with exhibits, pursuant to Rule 14d-3 of the General Rules and
Regulations under the Exchange Act, furnishing certain additional information
with respect to the U.S. Offer. The Schedule TO and any amendments thereto,
including exhibits, may be examined and copies may be obtained from the
offices of the Commission in the manner set forth in Section 8 of this U.S.
Offer to Purchase (except that such information will not be available at the
regional offices of the Commission).
IVAX HOLDINGS C.I.
May 31, 2001
39
SCHEDULE I
INFORMATION CONCERNING DIRECTORS AND EXECUTIVE
OFFICERS OF IVAX AND PURCHASER
1.DIRECTORS AND EXECUTIVE OFFICERS OF IVAX
The name, business address, present principal occupation or employment
and employment history of each director and executive officer of IVAX and
certain other information are set forth below. The principal business address
of IVAX and, unless otherwise indicated, the business address of each person
identified below is 4400 Biscayne Boulevard, Miami, Florida 33137. Its
telephone number is 305-575-6000. Where no date is shown, the individual has
occupied the position indicated for the past five years. Unless otherwise
indicated, each occupation set forth opposite an individual's name refers to
employment with IVAX. Unless otherwise indicated, all directors and executive
officers listed below are United States citizens. Directors are identified by
an asterisk.
Present Principal Occupation or
Name Employment and Five-Year Employment History
------------------------ -----------------------------------------------------
Phillip Frost, M.D.*.... Chairman of the Board of Directors and Chief
Executive Officer since 1987. He served as IVAX'
President from July 1991 until January 1995. He was
the Chairman of the Department of Dermatology at Mt.
Sinai Medical Center of Greater Miami, Miami Beach,
Florida from 1972 to 1990. Dr. Frost was Chairman of
the Board of Directors of Key Pharmaceuticals, Inc.
from 1972 to 1986 and Vice Chairman of the Board of
Directors of North American Vaccine, Inc. (vaccine
research and development) from 1989 to 2000. He is
Chairman of the Board of Directors of Whitman
Education Group, Inc. (proprietary education), Vice
Chairman of the Board of Directors of Continucare
Corporation (integrated health care), and a director
of Northrop Grumman Corp. (aerospace). He is Vice
Chairman of the Board of Trustees of the University
of Miami and a member of the Board of Governors of
the American Stock Exchange.
Neil Flanzraich*........ Vice Chairman and President since May 1998. He was a
shareholder and served as Chairman of the Life
Sciences Legal Practices Group of Heller Ehrman White
& McAuliffe from 1995 to 1998. From 1981 to 1994, he
served in various capacities at Syntex Corporation
(pharmaceuticals), most recently as its Senior Vice
President, General Counsel and a member of the
Corporate Executive Committee. From 1994 to 1995,
after Syntex Corporation was acquired by Roche
Holding Ltd., he served as Senior Vice President and
General Counsel of Syntex (U.S.A.) Inc., a Roche
subsidiary. He was Chairman of the Board of Directors
of North American Vaccine, Inc. (vaccine research and
development) from 1991 to 2000. He is a director of
Whitman Education Group, Inc. (proprietary
education).
Thomas Beier............ Senior Vice President--Finance and Chief Financial
Officer since October 1997. From December 1996 to
October 1997, he served as IVAX' Vice President--
Finance. Prior to joining IVAX, he served as
Executive Vice President and Chief Financial Officer
of Intercontinental Bank from 1989 until August 1996.
Rafick Henein, Ph.D. ... A Senior Vice President and the President and Chief
Executive Officer of IVAX Pharmaceuticals, Inc.,
IVAX' principal United States-based generic
pharmaceutical subsidiary since July 1997. He held
various positions in the Novopharm Limited
organization (pharmaceuticals) since 1988, rising to
the position of President and Chief Executive Officer
of Novopharm International in 1996. Dr. Henein is a
citizen of Canada.
SI-1
Present Principal Occupation or
Name Employment and Five-Year Employment History
------------------------ -----------------------------------------------------
Mark Andrews*........... Chairman and President of Great Spirits Company LLC
(consumer products) since founding it in 1998. He
served as the Chairman of the Board of Directors and
Chief Executive Officer of American Exploration
Company (oil and gas exploration and production) from
1980 until its merger into Louis Dreyfus Natural Gas
Corp. (oil and gas exploration and production) in
October 1997 when he became the Vice Chairman of the
Board of Directors of the combined entity. Mr.
Andrews has also served as Chairman of the Board of
Directors of Vault Mortgage Company (mortgage
brokerage) since 1998.
Ernst Biekert, Ph.D.*... Professor at the University of Heidelberg in Germany.
He was the Chairman of the Board and Chief Executive
Officer of Knoll A.G. (pharmaceuticals) from 1968 to
1985. Dr. Biekert was a consultant to BASF A.G.
(chemicals and pharmaceuticals) from 1985 to 1987 and
was Chairman of its pharmaceutical division from 1975
to 1985. Dr. Biekert is a citizen of the Federal
Republic of Germany.
Charles M. Fernandez*... President, Chief Executive Officer, and a director of
Big City Radio, Inc. (broadcasting/internet) since
1999. He has also been the Chairman of the Board of
Continucare Corporation (integrated health care)
since 1996 and was its Chief Executive Officer from
1996 to 1999. He has also been Vice-Chairman of
HealthCare2Net Solutions (internet solutions) since
1999. From 1985 to 1996, he was the Executive Vice
President and a director of Heftel Broadcasting
Corporation (radio broadcasting). From 1998 to 1999
he was a director of Frost Hanna Capital Group, Inc.
(investment company).
Jack Fishman, Ph.D.*.... Adjunct Professor at The Rockefeller University and
director of Research of Strang Cornell Cancer
Research Laboratory, a non-profit entity associated
with Cornell University Medical College. He served as
IVAX' Chief Scientific Officer from 1991 to 1995, as
a Vice Chairman of the Board from 1991 to 1997 and as
our President from 1988 to 1991. Dr. Fishman served
as a Research Professor of Biochemistry and Molecular
Biology at the University of Miami from 1988 to 1992.
Jane Hsiao, Ph.D.*...... Vice Chairman-Technical Affairs since February 1995,
as our Chief Technical Officer since July 1996, and
as Chairman, Chief Executive Officer and President of
DVM Pharmaceuticals, Inc., IVAX' veterinary products
subsidiary, since March 1998. From 1992 until
February 1995, she served as IVAX' Chief Regulatory
Officer and Assistant to the Chairman, and as
Vice President-Quality Assurance and Compliance of
Baker Norton Pharmaceuticals, Inc., our principal
proprietary pharmaceutical subsidiary. From 1987 to
1992, Dr. Hsiao was Vice President-Quality Assurance,
Quality Control and Regulatory Affairs of Baker
Norton Pharmaceuticals, Inc.
Isaac Kaye*............. Deputy Chief Executive Officer since 1990 and as
Chairman of Norton Healthcare Limited, IVAX'
principal United Kingdom pharmaceutical subsidiary,
since 1990. Mr. Kaye is a citizen of the Republic of
Ireland.
SI-2
2.DIRECTORS AND EXECUTIVE OFFICERS OF PURCHASER
The name, business address, present principal occupation or employment
and employment history of each director and executive officer of Purchaser and
certain other information are set forth below. The principal business address
of Purchaser and, unless otherwise indicated, the business address of each
person identified below is c/o IVAX, 4400 Biscayne Boulevard, Miami, Florida
33137. Purchaser's telephone number at this address is 305-575-6000. Where no
date is shown, except in the case of positions with Purchaser, the individual
has occupied the position indicated for the past five years. Unless otherwise
indicated, each occupation set forth opposite an individual's name refers to
position with Purchaser. Other than as indicated, all directors and executive
officers listed below are United States citizens.
Present Principal Occupation or
Name Employment and Five-Year Employment History
------------------------ -----------------------------------------------------
Neil Flanzraich*........ President. He is IVAX' Vice Chairman and President
since May 1998. He was a shareholder and served as
Chairman of the Life Sciences Legal Practices Group
of Heller Ehrman White & McAuliffe from 1995 to 1998.
From 1981 to 1994, he served in various capacities at
Syntex Corporation (pharmaceuticals), most recently
as its Senior Vice President, General Counsel and a
member of the Corporate Executive Committee. From
1994 to 1995, after Syntex Corporation was acquired
by Roche Holding Ltd., he served as Senior Vice
President and General Counsel of Syntex (U.S.A.)
Inc., a Roche subsidiary. He was Chairman of the
Board of Directors of North American Vaccine, Inc.
(vaccine research and development) from 1991 to 2000.
He is a director of Whitman Education Group, Inc.
(proprietary education).
Thomas Beier*........... Senior Vice President--Finance and Chief Financial
Officer of IVAX since October 1997. From December
1996 to October 1997, he served as IVAX' Vice
President--Finance. Prior to joining IVAX, he served
as Executive Vice President and Chief Financial
Officer of Intercontinental Bank from 1989 until
August 1996.
David Bowie*............ Vice President--Taxation of IVAX since April 1999.
From January 1998 to April 1999, he served as IVAX'
Director of Taxes. Prior to Joining IVAX, he held
various tax management positions with The Racal
Corporation, the United States-based subsidiary for
Racal Electronics, PLC from 1987 until 1997. Mr.
Bowie is a certified public accountant.
Rao Uppaluri*........... Vice President--Strategic Planning and Treasurer of
IVAX since November 2000. From 1997 to 2000, he
served as IVAX' Vice President of Strategic Planning.
Prior to joining IVAX, he served as Senior Vice
President and Chief Investment Officer of
Intercontinental Bank from 1988 until August 1996.
SI-3
SCHEDULE II
TRANSACTIONS CONCERNING SHARES AND ADSs
The following tables set forth information concerning transactions in
ADSs during the past 60 days by IVAX and the Purchaser. All purchases and sales
of ADSs were effected on the NYSE. Neither IVAX nor the Purchaser has purchased
or sold any Shares, other than Shares represented by ADSs, during the past 60
days.
ADSs
Type of
Trade Date # of ADSs Transaction Price
---------- --------- ----------- ------
4/9/01 5,000 Purchase $19.00
4/10/01 11,200 Purchase $19.14
4/16/01 7,700 Purchase $19.10
4/18/01 83,900 Purchase $20.41
4/19/01 114,000 Purchase $21.07
4/20/01 52,200 Purchase $20.98
4/23/01 49,900 Purchase $21.01
4/24/01 10,000 Purchase $21.00
4/25/01 111,500 Purchase $20.66
4/27/01 181,000 Sale $25.61
5/11/01 403,400 Sale $24.99
5/15/01 900 Sale $25.25
5/16/01 154,700 Sale $24.06
ANNEX I
PROCEDURES FOR TENDERING SHARES IN THE CHILEAN OFFER
U.S holders of Shares may tender Shares into the Chilean Offer. In order
to tender into the Chilean Offer, the following procedures must be complied
with. Defined terms herein have the meaning set forth in the Offer to
Purchase, unless otherwise indicated.
To accept the Chilean Offer Shareholders must tender their Shares to a
Chilean stock broker.
The tendered Shares must be registered in the name of the accepting
Shareholder, be fully paid and free and clear of liens, pledges and
encumbrances.
(a) Documents Required to Tender into the Chilean Offer.
Shareholders who are individuals and wish to tender into the Chilean
Offer must:
(i) execute the Form of Acceptance for all Shares that are tendered;
(ii) deliver to Deutsche Securities Corredores de Bolsa Limitada
("DB") the Titulo(s) for the Shares that are being offered, if
they are in his (her) possession, together with a certificate
issued by the shares division of the Company or by the Deposito
Central de Valores (the "DCV"), as the case may be, evidencing
the total number of shares owned by the Shareholder, the number
of Shares whose certificates are in the custody of the Company,
the number of Shares that are Shares of first issue, and
indicating the liens or encumbrances that affect the Shares;
(iii) show his (her) identity card or other document providing
evidence thereof and deliver to DB a photocopy of that
document, signed by the offering Shareholder, which photocopy
shall remain in the possession of DB;
(iv) in the event he (she) acts through a representative, show and
deliver to DB a copy of the power of attorney in effect with
sufficient representative authority executed or authorized
before a notary public in Chile;
(v) deliver, duly executed by the tendering Shareholder, the relevant
document of transfer of Shares, where the Shareholder appears as
seller and DB as the purchaser;
(vi) fill out the Client's Record File, in accordance with the
instructions issued by the SVS, and execute a document of
entrance into custody; and
(vii) deliver all the additional information that may be required in
order to evidence the authority and capacity of the offering
Shareholder to transfer the Shares.
The Shareholders that are legal entities and that wish to tender into
the Chilean Offer must:
(i) comply with paragraphs (i), (ii), (v), (vi) and (vii) above;
(ii) show the identity card or other document providing evidence
thereof of the legal representative and deliver to DB a
photocopy of such document, signed by the legal representative,
which shall remain in the possession of DB; and
(iii) show and deliver to DB a copy of the by-laws of the tendering
entity, and the power of attorney of the legal representative
in force with sufficient representative authority, executed or
authorized before a notary public in Chile.
A-1
(b) Place and Time for Tendering into the Chilean Offer
Shareholders may accept the Chilean Offer through DB, at the offices
located at Callao 2975, Suite 101, Las Condes County, or any other Chilean
stock broker, until the Expiration Date, from Monday through Friday, between
9:00 a.m. and 6:00 p.m., with the exception of the last day of the Chilean
Offer, when Shares must be tendered by 12:00 noon.
(c) Return of Shares in the Event the Chilean Offer is Withdrawn or Terminated
In the event IVAX withdraws the Chilean Offer prior to the Expiration
Date, or any extension thereof, or that the Chilean Offer otherwise
terminates, DB shall return to the tendering Shareholders the tendered Shares,
within two business days following the date in which the Chilean Offer is
withdrawn or terminated through the custody of the Company.
A-2
Facsimile copies of the Form of Acceptance and the ADS Letter of
Transmittal, properly completed and duly signed, will be accepted. Completed
Forms of Acceptance, accompanied by Ttulo(s), a duly signed Traspaso
indicating the number of Shares, but with the date left in blank and a power
of attorney to complete the Traspaso and all other documents of title and
transfer, should be delivered to the Receiving Agent at the addresses set
forth below. The ADS Letter of Transmittal, ADRs for the ADSs and any other
required documents should be sent by each holder of the ADSs or his or her
broker, dealer, commercial bank, trust company or other nominee to the
Receiving Agent at the addresses set forth below.
The Receiving Agent for the U.S. Offer is:
THE BANK OF NEW YORK
By Mail: Facsimile Transmission: By Hand or
(for Eligible Institutions
(212) 815-6213 Only) Overnight Courier:
(212) 815-6213
The Bank of New York The Bank of New York
Tender & Exchange Department Tender & Exchange Department
P.O. Box 11248 101 Barclay Street
Church Street Station Receive and Deliver Window
New York, NY 10286-1248 Fax Confirmation Telephone: New York, NY 10286
(212) 815-6156
Questions or requests for assistance or additional copies of this U.S.
Offer to Purchase, the Form of Acceptance, the ADS Letter of Transmittal and
the ADS Notice of Guaranteed Delivery may be directed to the Information Agent
or the Dealer Managers at their respective addresses and telephone numbers set
forth below. A holder of Shares and/or ADSs also may contact his or her
broker, dealer, commercial bank, trust company or other nominee for assistance
concerning the U.S. Offer.
The Information Agent for the U.S. Offer is:
D.F. KING & CO., INC.
77 Water Street
New York, New York 10005
Banks and Brokers Call Collect: (212) 269-5550
All Others Call Toll Free: (800) 758-5880
The Dealer Managers for the U.S. Offer are:
Merrill Lynch & Co. UBS Warburg LLC
Four World Financial Center 299 Park Avenue
New York, NY 10080 New York, NY 10171
Call Collect: (212) 236-3790 Call Collect: (212) 821-3983