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BY OUR PHARMA CORRESPONDENT
July 30, 2005: Novartis’ indirect wholly owned subsidiary, Zodnas Acquisition has successfully completed its tender offer for the outstanding public shares of Eon Labs.
Novartis has also completed its purchase of the 67.7% stake in Eon Labs that was owned by Santo Holding (Deutschland), the company announced.
The announcement was made on 21st July 2005, and came after an earlier announcement on 19th July that the US Federal Trade Commission had accepted a Consent Decree for public comment and granted early termination of the applicable Hart-Scott-Rodino waiting period, permitting Novartis to complete the acquisition. The product divestitures required by the Consent Decree were not material to it.
Novartis will divest three generic pharmaceuticals: desipramine hydrochloride, orphenadrine citrate extended-release and rifampin toAmide Pharmaceutical. The aggregate sales of the three were worth around US$5 million in 2004.
Prior to this, on 8th July, Novartis announced that it and the other defendants in a lawsuit related to Novartis' acquisition of Eon Labs had reached an agreement in principle with the plaintiffs to settle the litigation. Under the terms of the settlement for the pending suit at the Delaware Chancery Court, Eon Labs made additional disclosures in the Eon Labs Recommendation Statement on Schedule 14D-9.
Zodnas Acquisition and Novartis agreed to certain undertakings regarding the publicly held Eon shares, in the event that less than a majority of public shares are tendered in the offer. The agreement in principle also provided for an extension of the tender offer to at least 15th July 2005.
The settlement, which was subject to the approval of the Delaware Chancery Court, did not affect the economic terms of the outstanding tender offer.
Separately, Zodnas extended its cash tender offer to acquire all outstanding public shares of Eon for US$31 per share from 13th July 2005 to 20th July 2005, because the conditions to complete the offer had not yet been met. If shares were not accepted for payment by 21st July 2005, Eon's shareholders would have been able to withdraw their tendered shares.
Following the completion, Novartis announced a preliminary count by the depositary for the offer had shown there were tendered and not withdrawn some 26.2 million shares of Eon common stock at the time of closing. An additional 839,738 shares were guaranteed to be delivered within the next three days.
The shares represented around 30.4% of the total outstanding amount; this, together with the 67.7% stake purchased from Santo Holding, represented around 97.9% of Eon's total outstanding shares.
Novartis expects to complete the merger of Zodnas with Eon Labs within the next several days, in accordance with Delaware's short-form merger statute. As a result of the merger, each remaining outstanding share of Eon Labs will be converted into the right to receive the same US$31 per share in cash, without interest.
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