The Board of Directors of Algeta ASA unanimously recommends voluntary cash offer from Bayer to acquire the entire issued share capital of Algeta

Not intended for US media

  • Offer at NOK 362 per Algeta share, in cash, valuing the total share capital of

Algeta at approximately NOK 17.6 billion (USD 2.9 billion) on a fully diluted basis

  • Offer unanimously recommended by the Board of Directors of Algeta
  • Pre-acceptance of the Offer on certain terms and conditions by HealthCap IV,

Algeta’s largest shareholder


Oslo, Norway, 19 December, 2013 – The Board of Directors of Algeta ASA
(“Algeta”; OSE: ALGETA) today announced an agreement with the Bayer
Group (“Bayer”) whereby Bayer, through Aviator Acquisition AS, a whollyowned
subsidiary of Bayer Nordic SE, will launch a voluntary cash offer (the
“Offer”) to acquire the entire issued share capital of Algeta for NOK 362 per
share in cash. The Offer values the total share capital of Algeta at
approximately NOK 17.6 billion (USD 2.9 billion) on a fully diluted basis. The
Board of Directors of Algeta has unanimously decided to recommend that its
shareholders accept the Offer. The recommendation will be made public
through the Oslo Stock Exchange and appended to the offer document.

 

The Offer price represents a 37% premium to Algeta’s closing share price on 25
November 2013 and a 48% premium to the three-month volume weighted average
stock price on 25 November 2013, the last trading day prior to the announcement of
Bayer’s preliminary acquisition proposal.


“The Board of Directors of Algeta has undertaken a careful review of the terms and
conditions of the Offer. We believe the Offer recognizes the strategic value of Algeta
and delivers a considerable cash premium to our shareholders.” said Stein Holst
Annexstad, Chairman of the Board of Directors of Algeta. “Having worked with Bayer
since 2009, the Board of Directors is convinced of Bayer’s commitment to establishing
Xofigo® globally, and maximizing its blockbuster potential. We are also pleased that
Bayer intends to further invest in the potential of Algeta’s Targeted Thorium Conjugate
(TTC) research platform.”


Algeta’s largest and leading shareholder HealthCap IV1 has, on certain terms and
conditions, pre-accepted the Offer for all shares that it owns. In addition, Bayer has
received undertakings from each of the Directors and certain senior managers holding
shares in Algeta to tender their shares into the Offer, subject to certain conditions.
The total shares subject to these several commitments represent approximately 14%
of Algeta’s issued share capital.


Terms and conditions of the Offer

Under the terms of the Offer, Aviator Acquisition AS will make a voluntary offer to
acquire the entire issued share capital of Algeta for NOK 362 per share in cash. The
complete details of the Offer, including all terms and conditions, will be included in an
offer document expected to be distributed to Algeta shareholders in January 2014,
following approval by the Oslo Stock Exchange. The consummation of the Offer is
subject to satisfaction or waiver of customary conditions, including, without limitation,


1 The HealthCap managed funds HealthCap IV L.P. (3,324,407 shares), HealthCap IV Bis L.P. (2,402,147
shares), HealthCap IV KB (242,546 shares) and OFCO Club IV (90,900 shares)


a minimum acceptance of at least 90% or such lower percentage (not being less than
50%) of the outstanding Algeta shares as Aviator Acquisition AS determines,
regulatory approval by German competition authorities being obtained and no material
adverse change having occurred in Algeta. The Offer is not subject to any financing
condition. Bayer will finance the transaction with available cash and new debt. Bayer
expects to close the transaction during the first quarter of 2014.


The Board of Directors of Algeta has the right to withdraw its recommendation of the
Offer in the event a superior competing offer is announced that is not matched by
Bayer within three business days of being provided with notice thereof. Any such
amendment or withdrawal will permit Bayer to withdraw from the Offer. Algeta has
agreed to pay Bayer a break fee of 1.0% of the total Offer value in the event that the
Offer lapses following the announcement of a competing offer that results in the
acquisition of Algeta, payable upon completion of such competing offer. As part of the
agreement with Bayer and subject to customary exceptions, Algeta has entered into
undertakings not to solicit competing offers from third parties.


In the event the Offer is completed on the terms described above, there will be a
Change of Control Event under the Loan Agreement governing Algeta’s convertible
bonds due 2018. As described in the Loan Agreement, this would result in such bonds
being convertible at the Change of Control Conversion Price during the 60-day Change
of Control Conversion Period following the occurrence of such a Change of Control
Event (or notice thereof, if later). The conversion of bonds may, at the sole discretion
of Algeta, be settled, in whole or in part, by cash payment, as described in the Loan
Agreement.


Goldman Sachs International is acting as exclusive financial advisor to Algeta.
Skadden, Arps, Slate, Meagher & Flom LLP and Wikborg, Rein & Co. DA are acting as
legal advisors to Algeta.


DNB Markets has been engaged to provide the formal statement to be issued in
accordance with section 6-16 (1) c.f. 6-19 (1) of the Norwegian Securities Trading Act,
which includes a fairness opinion in support of the Board of Directors’ recommendation
of the Offer.


Centerview Partners provided an additional fairness opinion in support of the Board of
Directors’ recommendation of the Offer.

###

Xofigo® is a registered trademark of Bayer AG


For further information, please contact:

Oystein Soug +47 90 65 65 25
Chief Financial Officer


Mike Booth +1 646 410 1884
Communications & Corporate Affairs ir@algeta.com


About Algeta

Algeta is a company focused on developing, manufacturing and marketing novel
targeted therapies for patients with cancer. The company is headquartered in Oslo,


Norway, and has a US subsidiary, Algeta US, LLC, based in Cambridge, MA performing
commercial marketing operations in the US. Algeta is listed on the Oslo Stock
Exchange (Ticker: ALGETA). For more information please visit www.algeta.com.


Forward-looking Statements

This news release contains certain forward-looking statements that are based on
uncertainty, as they relate to events and depend on circumstances that will occur in
the future and which, by their nature, may have an impact on results of operations
and the financial condition of Algeta. Such forward-looking statements reflect our
current expectations and are based on the information currently available to Algeta.
Algeta cannot give any assurance as to whether such forward looking statements will
prove to be correct. These forward looking statements include statements regarding
the Offer, our expectations as to the launch of the Offer, including the terms of the
Offer and expected timing, expected benefits of the Offer for the development of
Xofigo® and our Targeted Thorium Conjugate (TTC) platform . There are a number of
factors that could cause actual results and developments to differ materially from
those expressed or implied by these forward-looking statements. These factors
include, among other things, satisfactions of conditions to the Offer, receipt of
regulatory clearance, and investor participation in the Offer.


About Xofigo® (radium Ra 223 dichloride)


Xofigo® is an alpha particle-emitting pharmaceutical. Xofigo’s active moiety mimics
calcium and selectively targets bone, specifically areas of bone metastases, by forming
complexes with the bone mineral hydroxyapatite. The high linear energy transfer of
alpha emitters (80 keV/micrometer) leads to a high frequency of double-strand DNA
breaks in adjacent tumour cells, resulting in a potent cytotoxic effect. Additional
effects on the tumour microenvironment including osteoblasts and osteoclasts also
contribute to the in vivo efficacy. The alpha particle range from Xofigo is less than 100
micrometers (less than 10 cell diameters), which minimizes damage to the
surrounding normal tissue.


Xofigo solution for injection is approved in Europe for the treatment of adults with
castration-resistant prostate cancer, symptomatic bone metastases and no known
visceral metastases.

Xofigo is approved in the US for the treatment of patients with castration-resistant
prostate cancer, symptomatic bone metastases and no known visceral metastatic
disease.


In September 2009, Algeta signed an agreement with Bayer for the development and
commercialization of Xofigo. Under the terms of this agreement, Bayer will develop,
apply for health authority approvals worldwide and commercialize Xofigo globally.
Algeta is eligible for royalties and milestones based on Bayer’s sales of Xofigo outside
the US, and Algeta US, LLC is co-promoting Xofigo with Bayer in the US.

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