Merck Recommends Rejection of TRC Capital’s “Mini-Tender” Offer

Rhea-AI Summary

Merck (MRK) warns shareholders about TRC Capital's unsolicited mini-tender offer to purchase up to 1,000,000 shares at $96.38 per share. The offer price is approximately 4.32% below Merck's closing price of $100.73 on November 11, 2024, and 3.48% below the $99.86 closing price on November 21, 2024. Merck strongly recommends shareholders reject this offer, which seeks to acquire less than 5% of outstanding shares, thereby avoiding SEC disclosure requirements. The company emphasizes that mini-tender offers often catch shareholders off guard, potentially leading to below-market sales prices.

Positive

• None.

Negative

• Potential shareholder value risk from TRC Capital's below-market mini-tender offer
• Offer price represents a 4.32% discount to market price
• Risk of shareholders unknowingly selling shares below market value

Insights

Legal Expert

This mini-tender offer by TRC Capital represents a predatory attempt to acquire Merck shares at a significant discount of 4.32% below market value. Mini-tender offers are concerning because they bypass important SEC disclosure requirements by targeting less than 5% of outstanding shares. The offer price of $96.38 per share versus the market price of $100.73 could result in substantial losses for uninformed investors.

The numerous conditions attached to this offer, including TRC Capital's financing contingency, create additional risk factors. TRC Capital's track record of similar mini-tender offers for other public companies suggests a pattern of exploiting retail investors through regulatory loopholes. Merck's strong stance against this offer and recommendation for shareholders to reject it aligns with SEC guidance on protecting investors from potentially deceptive mini-tender practices.

RAHWAY, N.J.--(BUSINESS WIRE)-- Merck (NYSE: MRK), known as MSD outside the United States and Canada, has been notified that TRC Capital Investment Corporation (TRC Capital) has commenced an unsolicited “mini-tender” offer, dated November 12, 2024, to purchase up to 1,000,000 shares of Merck common stock at $96.38 per share. The offer price is approximately 4.32% below the closing price of the Merck common stock on November 11, 2024 ($100.73), the last trading day before the date of the offer, and approximately 3.48% below the closing price of the Merck common stock on November 21, 2024 ($99.86), the day prior to this release.

Merck does not endorse TRC Capital’s offer and recommends that Merck shareholders reject the offer and not tender their shares in response to TRC Capital’s unsolicited mini-tender offer. This mini-tender offer is at a price below the closing price for Merck’s shares (as of the day prior to this release) and is subject to numerous conditions, including TRC Capital’s ability to obtain financing. Merck is not associated in any way with TRC Capital, its mini-tender offer or the offer documentation.

TRC Capital has made similar unsolicited mini-tender offers for shares of other publicly traded companies. Mini-tender offers seek to acquire less than 5% of a company's outstanding shares. This lets the offering company avoid many of the disclosure and procedural requirements the U.S. Securities and Exchange Commission (SEC) requires for tender offers. As a result, mini-tender offers do not provide investors the same level of protections as provided by larger tender offers under U.S. federal securities laws.

On its website, the SEC advises that the people behind mini tender-offers “frequently use mini-tender offers to catch shareholders off guard” and that investors “may end up selling at below-market prices.” The SEC's website also contains important tips for investors regarding mini-tender offers.

Like TRC Capital’s other offers, this one puts individual investors at risk because they may not realize they are selling their shares at a discount. Merck urges shareholders to obtain current stock quotes for their shares of Merck common stock, to review the terms and conditions of the offer, to consult with their brokers or financial advisers, and to exercise caution with respect to TRC Capital’s mini-tender offer.

Merck shareholders who have already tendered are advised they may withdraw their shares by following the procedures for withdrawal described in the TRC Capital offer documents prior to the expiration of the offer, which is currently scheduled for 11:59 a.m. EST on December 11, 2024.

Merck encourages brokers, dealers, and other investors to review the SEC’s letter regarding broker-dealer mini-tender offer dissemination and disclosure.

Merck requests that a copy of this news release be included with all distribution of materials related to TRC Capital’s offer for shares of Merck common stock.

About Merck
At Merck, known as MSD outside of the United States and Canada, we are unified around our purpose: We use the power of leading-edge science to save and improve lives around the world. For more than 130 years, we have brought hope to humanity through the development of important medicines and vaccines. We aspire to be the premier research-intensive biopharmaceutical company in the world – and today, we are at the forefront of research to deliver innovative health solutions that advance the prevention and treatment of diseases in people and animals. We foster a diverse and inclusive global workforce and operate responsibly every day to enable a safe, sustainable and healthy future for all people and communities. For more information, visit www.merck.com and connect with us on X (formerly Twitter), Facebook, Instagram, YouTube and LinkedIn.

Forward-Looking Statement of Merck & Co., Inc., Rahway, N.J., USA
This news release of Merck & Co., Inc., Rahway, N.J., USA (the “company”) includes “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements are based upon the current beliefs and expectations of the company’s management and are subject to significant risks and uncertainties. If underlying assumptions prove inaccurate or risks or uncertainties materialize, actual results may differ materially from those set forth in the forward-looking statements.

Risks and uncertainties include but are not limited to, general industry conditions and competition; general economic factors, including interest rate and currency exchange rate fluctuations; the impact of pharmaceutical industry regulation and health care legislation in the United States and internationally; global trends toward health care cost containment; technological advances, new products and patents attained by competitors; challenges inherent in new product development, including obtaining regulatory approval; the company’s ability to accurately predict future market conditions; manufacturing difficulties or delays; financial instability of international economies and sovereign risk; dependence on the effectiveness of the company’s patents and other protections for innovative products; and the exposure to litigation, including patent litigation, and/or regulatory actions.

The company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in the company’s Annual Report on Form 10-K for the year ended December 31, 2023 and the company’s other filings with the Securities and Exchange Commission (SEC) available at the SEC’s Internet site (www.sec.gov).

View source version on businesswire.com: https://www.businesswire.com/news/home/20241122275388/en/

Media Contacts:

Robert Josephson

(203) 914-2372

robert.josephson@merck.com

Michael Levey

(215) 872-1462

michael.levey@merck.com

Investor Contacts:

Peter Dannenbaum

(732) 594-1579

peter.dannenbaum@merck.com

Steven Graziano

(732) 594-1583

steven.graziano@merck.com

Source: Merck & Co., Inc.

FAQ

What is TRC Capital's offer price for Merck (MRK) shares in their mini-tender offer?

TRC Capital is offering $96.38 per share for up to 1,000,000 shares of Merck common stock.

How much below market price is TRC Capital's offer for Merck (MRK) stock?

The offer is 4.32% below Merck's closing price of $100.73 on November 11, 2024, and 3.48% below the $99.86 closing price on November 21, 2024.

When does TRC Capital's mini-tender offer for Merck (MRK) expire?

The offer is scheduled to expire at 11:59 a.m. EST on December 11, 2024.

Does Merck (MRK) recommend shareholders accept TRC Capital's mini-tender offer?

No, Merck explicitly recommends shareholders reject TRC Capital's mini-tender offer and not tender their shares.