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 of the Merger (the "Effective Time"), each share of common
stock, par value
At the Effective Time, each outstanding Company restricted stock award held by a nonemployee Company director will be converted into the right to receive the Merger Consideration. Each outstanding Company 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 Centene award, in each case, that is governed by the same terms and conditions as were applicable to such Company 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 Company performance-based restricted stock units converting at the target level of performance into Centene 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 the Company's stockholders; (ii) the
receipt of
The Company and Centene each made customary representations, warranties and covenants in the Merger Agreement, including the obligation of the Company to use reasonable best efforts to conduct its businesses in the ordinary course consistent with past practice and to refrain from taking specified actions without the consent of Centene. The parties have generally agreed to use their respective reasonable best efforts to obtain the required regulatory approvals for the transaction, including covenants by Centene to agree to take any and all actions (including divestiture actions) necessary to obtain the required regulatory approvals other than (i) commencing or defending litigation (except certain administrative appeals) or (ii) any action that would reasonably be expected to have a material adverse effect on (x) Centene and its subsidiaries, taken as a whole, (y) the Company and its subsidiaries, taken as a whole, or (z) the combined company (with Centene and its subsidiaries, taken as a whole, and the combined company, respectively, being deemed for these purposes to be of the size, scope and scale of the Company and its subsidiaries, taken as whole).
The Merger Agreement also contains a covenant restricting the Company's ability to solicit competing acquisition proposals, subject to certain exceptions designed to allow the board of directors of the Company to fulfill its fiduciary duties.
The Merger Agreement contains certain termination rights for both the Company
and Centene, including (i) if the Merger is not consummated on or before the
"outside date" of
The Merger Agreement also may be terminated by (i) Centene if the board of directors of the Company changes its recommendation or if the Company willfully breaches in any material respect its nonsolicitation obligations in the Merger Agreement which, if curable prior to the Company's stockholder meeting, is not cured within 10 business days after Centene delivers written notice thereof and (ii) the Company, subject to compliance with certain terms of the Merger Agreement, in order to enter into a definitive agreement with respect to a superior proposal.
The Company will be required to pay Centene a termination fee of
In addition, if an acquisition proposal is made for the Company, the Merger
Agreement is later terminated under certain circumstances and within twelve
months after termination the Company enters into an agreement to sell more than
50% of its capital stock or assets, the Company will be required to pay Centene
a fee of
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Changes in Fiscal Year.
On and effective as of
The Bylaw Amendment provides that, unless the Company consents in writing to the
selection of an alternative forum, the
Unless the Company consents in writing to the selection of an alternative forum,
the federal district courts of
This description of the Bylaw Amendment is qualified in its entirety by reference to the full text of the Bylaw Amendment, which is filed as Exhibit 3.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 8.01. Other Events.
The following additional materials that will be used by the Company in connection with the transaction are also filed herewith and incorporated by reference into this Item 8.01:
· Email sent to all employees of the Company regarding the transaction (Exhibit 99.1); · Manager Talking Points for Employees (Exhibit 99.2); · Excerpt of Employee FAQ (Exhibit 99.3); · Customer Letter (Exhibit 99.4); · Excerpt of Customer/Provider/Member Talking Points and FAQ (Exhibit 99.5); and · External FAQ (Exhibit 99.6).
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 among Centene Corporation,Mayflower Merger Sub, Inc. andMagellan Health, Inc. * 3.1 Amendment to the Bylaws ofMagellan Health, Inc. 99.1 Email to Employees ofMagellan Health, Inc. 99.2 Manager Talking Points for Employees ofMagellan Health, Inc. 99.3 Excerpt of Employee FAQ 99.4 Customer Letter 99.5 Excerpt of Customer / Provider / Member Talking Points and FAQ 99.6 External FAQ 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
* Schedules (and 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
Additional Information and Where to Find It
This communication may be deemed solicitation material in respect of the
proposed merger of
BEFORE MAKING ANY VOTING DECISION, THE COMPANY'S STOCKHOLDERS ARE URGED TO READ THE PROXY STATEMENT IN ITS ENTIRETY WHEN IT BECOMES AVAILABLE AND ANY OTHER DOCUMENTS FILED BY THE COMPANY WITH THE SEC IN CONNECTION WITH THE PROPOSED MERGER OR INCORPORATED BY REFERENCE THEREIN BEFORE MAKING ANY VOTING OR INVESTMENT DECISION WITH RESPECT TO THE PROPOSED MERGER BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER AND THE PARTIES TO THE PROPOSED MERGER.
Any vote in respect of resolutions to be proposed at the Company's stockholder
meetings to approve the proposed merger, the Merger Agreement or other responses
in relation to the proposed merger, should be made only on the basis of the
information contained in the Company's proxy statement. Stockholders may obtain
a free copy of the proxy statement and other documents the Company files with
the
No Offer or Solicitation
This communication is for information purposes only and is not intended to and does not constitute, or form part of, an offer, invitation or the solicitation of an offer or invitation to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of any securities, or the solicitation of any vote or approval in any jurisdiction, pursuant to the proposed merger or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law.
The proposed transaction will be implemented solely pursuant to the terms and conditions of the Merger Agreement, which contain the full terms and conditions of the proposed merger.
Participants in the Solicitation
The Company and its directors, executive officers and certain employees and
other persons may be deemed to be participants in the solicitation of proxies
from the Company's stockholders in connection with the proposed merger. Security
holders may obtain information regarding the names, affiliations and interests
of the Company's directors and executive officers in the Company's Annual Report
on Form 10-K for the fiscal year ended
Forward Looking Statements
This communication includes statements which may constitute forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, the accuracy of which are necessarily subject to risks, uncertainties, and assumptions as to future events that may not prove to be accurate. All statements, other than statements of current or historical fact, contained in this press release may be forward-looking statements. Without limiting the foregoing, the words "believes," "anticipates," "plans," "expects," "may," "should," "could," "estimate," "intend" and other similar expressions are intended to identify forward-looking statements. Forward-looking statements involve a number of known and unknown risks, uncertainties and other important factors, some of which are listed below, that could cause actual results and outcomes to differ materially from any future results or outcomes expressed or implied by such forward-looking statements. Important proposed merger-related and other risk factors that may cause such differences include: (i) the occurrence of any event, change or other circumstances that could give rise to the termination of the proposed merger; (ii) the transaction closing conditions may not be satisfied in a timely manner or at all, including due to the failure to obtain the Company stockholder approval and regulatory approvals; (iii) the announcement and pendency of the proposed merger may disrupt the Company's business operations (including the threatened or actual loss of employees, customers or suppliers); and (iv) the Company could experience financial or other setbacks if the transaction encounters unanticipated problems.
Other important factors that could cause actual results to differ materially
from those expressed or implied include , but are not limited to, the
effectiveness of business continuity plans during the COVID-19 pandemic; the
possible election of certain of the Company's customers to manage the healthcare
services of their members directly; changes in rates paid to and/or by the
Company by customers and/or providers; higher utilization of healthcare services
by the Company's members; risks and uncertainties associated with the pharmacy
benefits management industry; delays, higher costs or inability to implement new
business or other initiatives; the impact of changes in the contracting model
for Medicaid contracts; termination or non-renewal of customer contracts; the
impact of new or amended laws or regulations; governmental inquiries;
litigation; competition; operational issues; healthcare reform; general business
conditions; and the other factors discussed in the Company's most recent Annual
Report on Form 10-K and Quarterly Report on Form 10-Q and other filings we make
with the
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