Item 1.01 Entry into a Material Definitive Agreement
Agreement and Plan of Merger
On
Upon completion of the Merger, each share of KindredBio common stock that is
issued and outstanding immediately prior to the effective time of the Merger
(the "Effective Time") (other than certain excluded shares as described in the
Merger Agreement) will automatically be converted into the right to receive
In addition, at the Effective Time, (i) each share of KindredBio common stock subject to vesting, repurchase or other lapse restriction that is outstanding immediately prior to the Effective Time will fully vest (to the extent such stock would not otherwise vest) and be cancelled and converted automatically into the right to receive the Merger Consideration; (ii) each option to purchase shares of KindredBio common stock (other than rights to purchase shares of KindredBio common stock under the KindredBio employee stock purchase plan) (each, a "KindredBio Option"), whether vested or unvested and whether subject to time-based or performance-based vesting, that is outstanding immediately prior to the Effective Time will become fully vested (to the extent unvested or to the extent such KindredBio Option would not otherwise vest) and be automatically cancelled and converted into the right to receive a payment in cash equal to the product of (a) the excess, if any, of the Merger Consideration over the exercise price per share subject to such KindredBio Option and (b) the total number of shares subject to such KindredBio Option; and (iii) each award of restricted stock units denominated in shares of KindredBio common stock, whether subject to time-based or performance-based vesting, that is outstanding immediately prior to the Effective Time (each, a "KindredBio RSU Award") will become fully vested (to the extent unvested or to the extent such award would not otherwise vest), and be automatically cancelled and converted into the right to receive a payment in cash equal to the product of (A) the total number of shares of KindredBio common stock subject to such KindredBio RSU Award and (B) the Merger Consideration. Any KindredBio Option with a per share exercise price equal to or greater than the Merger Consideration will be cancelled for no consideration.
The completion of the Merger is subject to the satisfaction or waiver of certain
conditions, including (i) requisite approval of the holders of KindredBio common
stock; (ii) the absence of any law or order in
The Merger Agreement contains representations, warranties and covenants of the parties customary for a transaction of this nature. Among other things, until the earlier of the termination of the Merger Agreement and the Effective Time, KindredBio has agreed to operate its business in all respects within 120 days from the date of the Merger Agreement, and in all material respects thereafter, in the ordinary course consistent with past practice and has agreed to certain other operating covenants, as set forth fully in the Merger Agreement. The Merger Agreement also prohibits KindredBio's solicitation of proposals relating to alternative transactions and restricts KindredBio's ability to participate in any discussions or negotiations with, or furnish nonpublic information to, any third party with respect to any such transaction, subject to certain limited exceptions.
--------------------------------------------------------------------------------
The Merger Agreement may be terminated by mutual written consent of Elanco and
KindredBio. The Merger Agreement also permits either party to terminate if (i)
the Merger is not completed by
Elanco also may terminate the Merger Agreement if the board of directors of KindredBio makes an adverse change in its recommendation that KindredBio's stockholders adopt the Merger Agreement or if KindredBio violates or breaches in any material respect the non-solicitation provision of the Merger Agreement in certain circumstances. KindredBio also may terminate the Merger Agreement if it enters into a definitive agreement with respect to a Superior Proposal (as such term is defined in the Merger Agreement), subject to, among other things, payment of the termination fee to Elanco as described below.
KindredBio may be required to pay Elanco a termination fee of
The foregoing descriptions of the Merger and the Merger Agreement do not purport to be complete and are qualified in their entirety by reference to the Merger Agreement, which is filed as Exhibit 2.1 hereto and is incorporated herein by reference.
Important Statement regarding the Merger Agreement. The Merger Agreement has been included to provide investors with information regarding terms of the Merger. It is not intended to provide any other factual information about the Company, Elanco, or their respective subsidiaries or affiliates. The representations, warranties, and covenants contained in the Merger Agreement were made only for purposes of the Merger Agreement and as of specific dates, were solely for the benefit of the parties to the Merger Agreement, may be subject to limitations, qualifications or other particulars 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 or made for other purposes, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Investors are not third-party beneficiaries under the Merger Agreement and should not rely on the representations, warranties, and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the parties thereto or any of their respective subsidiaries or affiliates. Moreover, . . .
Item 8.01 Other Events. Support Agreements
--------------------------------------------------------------------------------
Concurrently with the execution and delivery of the Merger Agreement, certain stockholders of KindredBio (each a "Stockholder") entered into a Support Agreement (the "Support Agreements") with Elanco and Merger Sub, pursuant to which each Stockholder agreed, among other things, to vote his, her or its Covered Shares (as defined in the Support Agreement) (i) in favor of the adoption of the Merger Agreement, the Merger and the transactions contemplated thereby and the approval of all agreements related to the Merger, and any proposal to adjourn or postpone the stockholder meeting to a later date if there are not sufficient votes for adoption of the Merger Agreement; (ii) against any Acquisition Proposal (as defined in the Merger Agreement); (iii) against any extraordinary corporate transaction such as a merger agreement or merger (other than the Merger Agreement and the Merger), consolidation, combination, share exchange, reorganization, recapitalization, dissolution, liquidation or winding up of or by KindredBio, or any sale, lease, license or transfer of a material amount of assets of KindredBio; (iv) against any change in or to (a) KindredBio's board of directors that is not recommended by its existing board of directors, (b) the present capitalization or corporate structure of KindredBio, or (c) KindredBio's governing documents that is not consented to by Elanco under the Merger Agreement; and (v) against any proposal, action or agreement that would reasonably be expected to (1) result in a breach of any covenant, representation, warranty or other obligation or agreement of the Stockholder under the Support Agreement or, to the Stockholder's knowledge, of KindredBio under the Merger Agreement or (2) to the Stockholder's knowledge, impede, interfere with or prevent the consummation of the Merger. No Stockholder may propose, commit or agree to take any action inconsistent with any of the foregoing clauses (i), (ii), (iii), (iv) or (v).
Each Stockholder also agreed that, except as provided in the Support Agreement, he, she or it will not (i) offer to transfer, transfer or consent to transfer any of its Covered Shares; (ii) enter into any agreement to transfer his, her or its Covered Shares; (iii) grant any proxy, power-of-attorney or other authorization in respect of its Covered Shares; (iv) deposit or permit the deposit of any of its Covered Shares into a voting trust or enter into a voting agreement or arrangement; (v) create or permit to exist any lien on any of the Covered Shares, or (vi) take any other action that would restrict, limit or interfere with the performance of the Stockholder's obligations under the Support Agreement in any material respect or otherwise make any representation or warranty of the Stockholder untrue or incorrect in any material respect.
Each Stockholder signed the Support Agreement solely in his or her capacity as a stockholder. The Support Agreements do not prohibit any Stockholder from acting (or failing to act) in his or her capacity as an officer or director of KindredBio.
As of
Press Release
On
Important Information for Investors and Stockholders
This communication does not constitute a solicitation of any vote or approval in
connection with the proposed acquisition of
--------------------------------------------------------------------------------
becomes available) may be obtained free of charge from Investor Relations at
Participants in the Merger Solicitation
Elanco, KindredBio, and certain of their directors, executive officers and
employees may be considered participants in the solicitation of proxies from
KindredBio's stockholders with respect to the proposed transactions. Information
regarding the persons who may, under the
Cautionary Statement Regarding Forward-Looking Statements
Statements included in this communication that are not a description of
historical facts are forward-looking statements. Words or phrases such as
"believe," "may," "could," "will," "estimate," "continue," "anticipate,"
"intend," "seek," "plan," "expect," "should," "would" or similar expressions are
intended to identify forward-looking statements, and are based on our current
beliefs and expectations. These forward-looking statements include, without
limitation, statements regarding the proposed acquisition of KindredBio, the
expected timetable for completing the transaction, future financial and
operating results, benefits and synergies of the transaction, future
opportunities for the combined businesses and any other statements regarding
events or developments that Elanco believes or anticipates will or may occur in
the future. You are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof. There are a
number of important factors that could cause actual events to differ materially
from those suggested or indicated by such forward-looking statements. These
factors include risks and uncertainties related to, among other things:
uncertainties as to the timing of the Merger; the possibility that competing
acquisition proposals will be made; the inability to complete the Merger due to
the failure to obtain KindredBio's stockholder adoption of the Merger Agreement
or the failure to satisfy other conditions to completion of the Merger,
including required regulatory approvals; the failure of the transaction to close
for any other reason; the effects of disruption caused by the transaction making
it more difficult to maintain relationships with employees, collaborators,
customers, vendors and other business partners; the risk that stockholder
litigation in connection with the Merger may result in significant costs of
defense, indemnification and liability; diversion of management's attention from
ongoing business concerns and other risks and uncertainties that may affect
future results of the combined company, including the risks described in the
section entitled "Risk Factors" in Elanco's and KindredBio's Annual Reports on
Form 10-K for the year ended
--------------------------------------------------------------------------------
Item 9.01 Financial Statements and Exhibits. Exhibit No. Description 2.1* Agreement and Plan of Merger, dated as ofJune 15, 2021 , by and amongKindred Biosciences, Inc. , Elanco Animal Health Incorporated andKnight Merger Sub, Inc. 99.1 Form of Support Agreement, dated as ofJune 15, 2021 , by and among certain stockholders ofKindred Biosciences, Inc. , Elanco Animal HealthIncorporated and Knight Merger Sub, Inc. 99.2 Joint Press Release ofKindred Biosciences, Inc. and Elanco Animal Health Incorporated issued onJune 16, 2021 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
*Pursuant to Item 601(b)(2) of Regulation S-K, the schedules to the Agreement
and Plan of Merger have been omitted and
--------------------------------------------------------------------------------
© Edgar Online, source