MorphoSys and Novartis Sign Delisting Agreement and Intend to Implement a Merger Squeeze-out of MorphoSys’ Minority Shareholders
MorphoSys and Novartis have signed a delisting agreement following Novartis' acquisition of MorphoSys in May 2024. Novartis holds 91.04% of MorphoSys shares and plans to launch a delisting offer for the remaining shares at €68.00 per share. This offer period is expected to commence in early July 2024. Additionally, Novartis aims to merge MorphoSys into Novartis, initiating a squeeze-out of minority shareholders with appropriate cash compensation, to be resolved at the MorphoSys AGM in August 2024. Post delisting, MorphoSys shares will no longer trade on the Frankfurt Stock Exchange or NASDAQ.
- Novartis holds 91.04% of MorphoSys shares, solidifying control.
- Delisting offer provides €68.00 per share to remaining shareholders.
- Minority shareholders to be squeezed out, losing their stock holdings.
- MorphoSys shares will no longer be traded on public exchanges, reducing liquidity.
Insights
Financial Implications for Shareholders: The delisting and intended merger of MorphoSys into Novartis highlight significant changes for current MorphoSys investors. The
For those who invested in MorphoSys with the anticipation of long-term growth, the delisting means an end to public trading and potential capital appreciation through the open market. The removal of compliance costs associated with public listings could improve operational efficiency for MorphoSys, albeit within the confines of Novartis’ broader strategy.
Retail investors must consider the squeeze-out and its implications. Squeeze-outs typically offer cash compensation, but the amount is yet to be determined. This compensation will likely be scrutinized for fairness, especially in comparison to the
In conclusion, while the news provides security of cash exit at a set price, it may be disappointing for those hoping for higher future valuation. The overall rating for this news from a financial perspective is positive due to the liquidity opportunity provided.
Legal and Regulatory Perspective: The delisting and merger squeeze-out are complex processes heavily governed by securities law in both Germany and the U.S. The compliance with the German Securities Acquisition and Takeover Act and the U.S. SEC regulations ensures transparency and fairness during the transition. The delisting offer must be approved by BaFin and the necessary documentation must be filed with the SEC, ensuring that the process adheres to both German and U.S. regulatory standards.
The involvement of regulatory bodies like BaFin and the SEC provides a layer of protection for minority shareholders by enforcing adequate disclosure and fairness in the process. However, minority shareholders could feel disenfranchised, especially if the cash compensation for the squeeze-out is below their expectations.
The delisting will shield MorphoSys from the regulatory scrutiny and reporting obligations of public markets, potentially allowing for more streamlined operations. Yet, it also removes the transparency that comes from being a publicly traded company. Overall, the regulatory adherence provides confidence, but the minority shareholder impact is a potential drawback, leading to a neutral rating for this aspect.
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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
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
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
Following BaFin approval, the Delisting Offer document and additional information relating to the Delisting Offer will be published by Novartis on this website: https://www.novartis.com/investors/morphosys-acquisition/delisting-purchase-offer. 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
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.
About MorphoSys
At MorphoSys, we are driven by our mission: More life for people with cancer. As a global biopharmaceutical company, we develop and deliver innovative medicines, aspiring to redefine how cancer is treated. MorphoSys is headquartered in Planegg,
Additional Information and Where to Find It
The delisting offer described in this communication (the “Delisting Offer”) has not yet commenced. This communication is neither an offer to purchase nor a solicitation of an offer to sell shares of MorphoSys AG (the “Company”). The final terms and further provisions regarding the Delisting Offer will be in the offer document once the publication of the offer document by Novartis BidCo AG (the “Bidder”) has been approved by the German Federal Financial Supervisory Authority (the “BaFin”), after which the offer document will be filed with the
In addition to the Offer to Purchase, including the means to tender and certain other Delisting Offer Documents, as well as the Solicitation/Recommendation Statement, the Company files other information with the SEC. The Company’s filings with the SEC are also available for free to the public from commercial document-retrieval services and at the website maintained by the SEC at www.sec.gov and are also available free of charge under the “SEC Filings” section of the Company’s website at www.morphosys.com/en/investors.
In order to reconcile certain areas where German law and
Acceptance of the Delisting Offer by stockholders residing outside
Forward-Looking Statements
This communication contains certain forward-looking statements concerning the Company, the Bidder and the Delisting Offer that involve substantial risks and uncertainties. Forward-looking statements include any statements containing the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “goal,” “may,” “might,” “plan,” “predict,” “project,” “seek,” “target,” “potential,” “will,” “would,” “could,” “should,” “continue” and similar expressions. In this communication, the Company’s forward-looking statements include statements about the expected timetable for the consummation of the Delisting Offer and the delisting; the Company’s plans, objectives, expectations and intentions; and the financial condition, results of operations and business of the Company and Novartis AG.
The forward-looking statements contained in this communication represent the judgment of the Company as of the date of this communication and involve known and unknown risks and uncertainties, which might cause the actual results, financial condition and liquidity, performance or achievements of the Company, or industry results, to be materially different from any historic or future results, financial conditions and liquidity, performance or achievements expressed or implied by such forward-looking statements. In addition, even if the Company's results, performance, financial condition and liquidity, and the development of the industry in which it operates are consistent with such forward-looking statements, they may not be predictive of results or developments in future periods. Those risks and uncertainties that could cause the actual results to differ from expectations contemplated by forward-looking statements include, among other things: uncertainties as to the timing of the Delisting Offer; uncertainties as to how many of the Company’s stockholders will tender their stock in the Delisting Offer; the possibility that competing offers will be made; the effects of the acquisition of MorphoSys by Novartis AG on relationships with employees, other business partners or governmental entities; that the Bidder and Novartis AG may not realize the potential benefits of the acquisition of MorphoSys by Novartis AG; transaction costs associated with the Delisting Offer; potential operational difficulties with integrating MorphoSys with Novartis AG; that the Company’s expectations may be incorrect; the inherent uncertainties associated with competitive developments, clinical trial and product development activities and regulatory approval requirements; the Company's reliance on collaborations with third parties; estimating the commercial potential of the Company’s development programs; and other risks indicated in the risk factors included in the Company’s filings with the SEC, including the Company’s Annual Report on Form 20-F, as well as the Solicitation/Recommendation Statement on Schedule 14D-9 to be filed by the Company and the Tender Offer Statement on Schedule TO and related Delisting Offer documents to be filed by the Bidder and Novartis AG. Given these uncertainties, the reader is advised not to place any undue reliance on such forward-looking statements. These forward-looking statements speak only as of the date of publication of this communication. The Company and the Bidder expressly disclaim any obligation to update any such forward-looking statements in this communication to reflect any change in its expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements, unless specifically required by law or regulation.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240619218783/en/
Media:
Thomas Biegi
Senior Vice President, Corporate Affairs
Tel.: +49 (0)89 / 899 27 26079
thomas.biegi@morphosys.com
Eamonn Nolan
Senior Director, Corporate Communications & Investor Relations
Tel: +1 617-548-9271
eamonn.nolan@morphosys.com
Investor:
Dr. Julia Neugebauer
Vice President, Global Investor Relations
Tel: +49 (0)89 / 899 27 179
julia.neugebauer@morphosys.com
Source: MorphoSys AG
FAQ
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