MorphoSys and Novartis Sign Delisting Agreement and Intend to Implement a Merger Squeeze-out of MorphoSys’ Minority Shareholders

On June 20, 2024 MorphoSys AG (FSE: MOR; NASDAQ: MOR) reported that the company has entered into a delisting agreement with Novartis BidCo AG and Novartis AG following the successful closing of the acquisition of MorphoSys by Novartis in May 2024 (Press release, MorphoSys, JUN 20, 2024, View Source [SID1234644468]). Novartis BidCo Germany AG (together with Novartis BidCo AG and Novartis AG hereinafter collectively referred to as "Novartis") also informed MorphoSys of their intention to merge MorphoSys into Novartis by initiating a squeeze-out of MorphoSys’ minority shareholders.

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In April 2024, Novartis submitted a voluntary public takeover offer for all outstanding MorphoSys no-par value bearer shares, offering MorphoSys shareholders € 68.00 per share in cash (the "Takeover Offer"). The acceptance period of the Takeover Offer and the statutory two-week additional acceptance period ended on May 13, 2024, and May 30, 2024, respectively. As of June 20, 2024, Novartis holds approximately 91.04% of the total MorphoSys share capital, including purchases by Novartis outside of the Takeover Offer. As a result, Novartis is the majority shareholder of MorphoSys, making MorphoSys a Novartis company.

MorphoSys and Novartis Sign Delisting Agreement

Following the settlement of the Takeover Offer, MorphoSys and Novartis today signed an agreement confirming that Novartis intends to launch a public delisting purchase offer (the "Delisting Offer") for all outstanding MorphoSys no-par value bearer shares that are not presently held by Novartis. Novartis will offer MorphoSys shareholders € 68.00 per share in cash, corresponding to its preceding Takeover Offer.

The Delisting Offer document is expected to be published by Novartis in early July 2024 after the German Federal Financial Supervisory Authority ("BaFin") has approved its publication, in accordance with the provisions of the German Securities Acquisition and Takeover Act. Once the Delisting Offer document is published by Novartis, a four-week (but not less than 20 U.S. business days) offer period for MorphoSys shareholders to tender their shares will commence.

Following publication of the Delisting Offer document, the MorphoSys Management Board and Supervisory Board will issue a joint reasoned statement in accordance with sec. 27 of the German Securities Acquisition and Takeover Act. Additionally, in accordance with U.S. securities laws, Novartis will file the Delisting Offer document and a Tender Offer Statement on Schedule TO, and MorphoSys will file the joint reasoned statement and a Solicitation/Recommendation Statement on Schedule 14D-9 with the U.S. Securities and Exchange Commission (the "SEC").

Following BaFin approval, the Delisting Offer document and additional information relating to the Delisting Offer will be published by Novartis on this website: View Source The Tender Offer Statement on Schedule TO and the Solicitation/Recommendation Statement on Schedule 14D-9 will be made available on the SEC’s website at www.sec.gov and under the "SEC Filings" section of the MorphoSys website at www.morphosys.com/en/investors.

Following the publication of the Delisting Offer document by Novartis, MorphoSys will apply for revocation of the admission to trading of MorphoSys shares on the regulated market of the Frankfurt Stock Exchange. MorphoSys also intends to delist from NASDAQ. After the delisting becomes effective, MorphoSys shares will no longer be traded on the regulated market of the Frankfurt Stock Exchange or on NASDAQ, and follow-up obligations from such a public listing no longer apply. Additionally, following deregistration with the SEC, MorphoSys will no longer be required to file reports with the SEC. Both the delisting from the Frankfurt Stock Exchange and the delisting from NASDAQ are expected to take place in the third quarter of 2024.

MorphoSys and Novartis Intend to Implement a Merger Squeeze-out of MorphoSys’ Minority Shareholders

Novartis also informed MorphoSys of their intention to merge MorphoSys into Novartis. In this context, Novartis has proposed entering negotiations with the MorphoSys Management Board regarding a merger agreement.

Given Novartis holds approximately 91.04% of the total MorphoSys share capital, Novartis is able to facilitate a squeeze-out of MorphoSys’ minority shareholders in connection with such a merger. Novartis will therefore seek the transfer of MorphoSys’ minority shareholders’ shares to Novartis against an adequate cash compensation (merger squeeze-out). The amount of the cash compensation has not yet been determined.

It is planned that the necessary shareholders’ resolution on the merger squeeze-out will be adopted at the MorphoSys Annual General Meeting expected to take place in August 2024.