Item 1.01. Entry Into a Material Definitive Agreement.
On
On the terms and subject to the conditions set forth in the Merger Agreement, at
the Effective Time, each share of common stock, par value
At the Effective Time, each outstanding Magellan Health restricted stock award held by a nonemployee Magellan director will be converted into the right to receive the Merger Consideration. Each outstanding Magellan Health restricted stock award (other than those held by nonemployee directors), time-based restricted stock unit, performance-based restricted stock unit, stock option and phantom cash unit will be converted at such time into a corresponding Company award, in each case, that is governed by the same terms and conditions as were applicable to such Magellan Health equity award immediately prior to the Effective Time, with an equivalent fair market value determined in accordance with the terms of the Merger Agreement (with Magellan Health performance-based restricted stock units converting at the target level of performance into Company time-based restricted stock units).
As of the Effective Time, the directors of Merger Sub immediately prior to the
Effective Time will become the directors of the
The consummation of the Merger is subject to certain conditions, including (i)
the adoption of the Merger Agreement by Magellan Health's stockholders, (ii) the
receipt of
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The Merger Agreement also contains a covenant restricting Magellan Health's ability to solicit competing acquisition proposals, subject to certain exceptions designed to allow the board of directors of Magellan Health to fulfill its fiduciary duties.
The Merger Agreement contains certain termination rights for both the Company
and Magellan Health, including (i) if the Merger is not consummated on or before
the "outside date" of
The Merger Agreement may also be terminated (i) by the Company if the board of directors of Magellan Health changes its recommendation or if Magellan Health willfully breaches in any material respect its nonsolicitation obligations in the Merger Agreement which, cannot be cured prior to Magellan Health's stockholder meeting or, if curable prior to Magellan Health's stockholder meeting, is not cured within 10 business days after the Company delivers written notice thereof and (ii) by Magellan Health, subject to compliance with certain terms of the Merger Agreement, in order to enter into a definitive agreement with respect to a superior proposal.
Magellan Health will be required to pay the Company a termination fee of
In addition, if an acquisition proposal is made for Magellan Health, the Merger
Agreement is later terminated under certain circumstances and within twelve
months after termination Magellan Health enters into an agreement to sell more
than 50% of its capital stock or assets, Magellan Health will be required to pay
the Company a fee of
In connection with the entry into the Merger Agreement, the Company has entered
into a bridge financing commitment, dated
The foregoing description of the Merger Agreement, the Merger and the
transactions contemplated thereby is not complete and is subject to, and
qualified in its entirety by reference to, the full text of the Merger
Agreement, a copy of which is attached hereto as Exhibit 2.1 and is incorporated
herein by reference in its entirety. The Merger Agreement has been attached to
provide investors with information regarding its terms. It is not intended to
provide any other factual information about the Company or Magellan Health. The
representations, warranties and covenants in the Merger Agreement were made
solely for the benefit of the parties to the Merger Agreement; are subject to
limitations agreed upon by the contracting parties, including being qualified by
confidential disclosures made for the purposes of allocating contractual risk
between the parties to the Merger Agreement instead of establishing these
matters as facts; and are subject to standards of materiality applicable to the
contracting parties that may differ from those applicable to investors. In
particular, the assertions embodied in the representations and warranties
contained in the Merger Agreement may be subject to important qualifications and
limitations agreed to by the Company and Magellan Health in connection with the
negotiated terms of the Merger Agreement. Moreover, information concerning the
subject matter of the representations, warranties and covenants may change after
the date of the Merger Agreement. Further, the Merger Agreement should not be
read alone but instead should be read in conjunction with the other information
regarding the Merger Agreement, the Merger, the Company, Magellan Health, their
respective affiliates and their respective businesses that will be contained in,
or incorporated by reference into, the proxy statement that will be filed with
the
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Item 9.01. Financial Statements and Exhibits.
(d) Exhibits. Exhibit Number Description 2.1 Agreement and Plan of Merger, dated as ofJanuary 4, 2021 , by and amongCentene Corporation ,Mayflower Merger Sub, Inc. and Magellan Health, Inc.* 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
* Schedules (as similar attachments) have been omitted from this filing pursuant
to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule will be
furnished to the
Cautionary Statement of Forward-Looking Statements
All statements, other than statements of current or historical fact, contained
in this communication are forward-looking statements. Without limiting the
foregoing, forward-looking statements often use words such as "believe,"
"anticipate," "plan," "expect," "estimate," "intend," "seek," "target," "goal,"
"may," "will," "would," "could," "should," "can," "continue" and other similar
words or expressions (and the negative thereof).
These forward-looking statements reflect our current views with respect to future events and are based on numerous assumptions and assessments made by us in light of our experience and perception of historical trends, current conditions, business strategies, operating environments, future developments and other factors we believe appropriate. By their nature, forward-looking statements involve known and unknown risks and uncertainties and are subject to change because they relate to events and depend on circumstances that will occur in the future, including economic, regulatory, competitive and other factors that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions.
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All forward-looking statements included in this communication are based on
information available to us on the date hereof. Except as may be otherwise
required by law, we undertake no obligation to update or revise the
forward-looking statements included in this communication, whether as a result
of new information, future events or otherwise, after the date hereof. You
should not place undue reliance on any forward-looking statements, as actual
results may differ materially from projections, estimates, or other
forward-looking statements due to a variety of important factors, variables and
events including but not limited to: the risk that regulatory or other approvals
required for the Transaction may be delayed or not obtained or are obtained
subject to conditions that are not anticipated that could require the exertion
of management's time and our resources or otherwise have an adverse effect on
the Company; the risk that Magellan Health's stockholders do not adopt the
merger agreement; the possibility that certain conditions to the consummation of
the Transaction will not be satisfied or completed on a timely basis and
accordingly the Transaction may not be consummated on a timely basis or at all;
the impact of COVID-19 on global markets, economic conditions, the healthcare
industry and our results of operations, which is unknown, and the response by
governments and other third parties; uncertainty as to the expected financial
performance of the combined company following completion of the Transaction;
uncertainty as to our expected financial performance during the period of
integration of the WellCare Acquisition; the possibility that the expected
synergies and value creation from the Transaction or the WellCare Acquisition
will not be realized, or will not be realized within the expected time period;
the exertion of management's time and our resources, and other expenses incurred
and business changes required, in connection with complying with the
undertakings in connection with any regulatory, governmental or third party
consents or approvals for the Transaction; the risk that unexpected costs will
be incurred in connection with the completion and/or integration of the
Transaction or the integration of the WellCare Acquisition or that the
integration of Magellan Health or WellCare will be more difficult or time
consuming than expected; the risk that potential litigation in connection with
the Transaction may affect the timing or occurrence of the Transaction or result
in significant costs of defense, indemnification and liability; a downgrade of
the credit rating of our indebtedness, which could give rise to an obligation to
redeem existing indebtedness; unexpected costs, charges or expenses resulting
from the Transaction or the WellCare Acquisition; the possibility that competing
offers will be made to acquire Magellan Health; the inability to retain key
personnel; disruption from the announcement, pendency and/or completion of the
Transaction or the integration of the WellCare Acquisition, including potential
adverse reactions or changes to business relationships with customers,
employees, suppliers or regulators, making it more difficult to maintain
business and operational relationships; the risk that, following the
Transaction, the combined company may not be able to effectively manage its
expanded operations; our ability to accurately predict and effectively manage
health benefits and other operating expenses and reserves, including
fluctuations in medical utilization rates due to the impact of COVID-19;
competition; membership and revenue declines or unexpected trends; changes in
healthcare practices, new technologies, and advances in medicine; increased
healthcare costs; changes in economic, political or market conditions; changes
in federal or state laws or regulations, including changes with respect to
income tax reform or government healthcare programs as well as changes with
respect to the Patient Protection and Affordable Care Act (ACA) and the Health
Care and Education Affordability Reconciliation Act, collectively referred to as
the ACA and any regulations enacted thereunder that may result from changing
political conditions or judicial actions, including the ultimate outcome in
"Texas v.
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This list of important factors is not intended to be exhaustive. We discuss
certain of these matters more fully, as well as certain other factors that may
affect our business operations, financial condition and results of operations,
in our filings with the
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