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Morgan Stanley, MUFG Back Bristol-Myers Squibb Merger with Celgene

January 04, 2019, 09:00 AM
Filed Under: Pharmaceuticals

Bristol-Myers Squibb Company and Burgundy Merger Sub, Inc., a wholly owned subsidiary of BMS, entered into an Agreement and Plan of Merger with Celgene Corporation (Celgene). The Merger Agreement provides, among other things, that on the terms and subject to the conditions set forth therein, Merger Sub will merge with and into Celgene, with Celgene surviving as a wholly owned subsidiary of BMS (the Merger).

In the Merger, each share of Celgene common stock issued and outstanding immediately prior to the effective time of the Merger (other than certain excluded shares as described in the Merger Agreement) will automatically be converted into the right to receive (1) $50.00 in cash, without interest, (2) one share of BMS common stock and (3) one tradeable contingent value right (a “CVR”) representing the right to receive $9.00 in cash if a specified set of milestones is achieved, as set forth in the CVR Agreement (as defined and described below).

On January 2, 2019, BMS entered into a bridge facility commitment letter pursuant to which Morgan Stanley Senior Funding, Inc. and MUFG Bank, Ltd. have committed to provide a 364-day senior unsecured bridge term loan facility in an aggregate principal amount of $33.5 billion to finance the acquisition by BMS pursuant to the Merger Agreement. The Bridge Facility will be drawn upon in the event that BMS has not issued and/or received a combination of proceeds, together with available cash on hand, from (i) unsecured debt securities, (ii) term loan facilities and revolving credit facilities and (iii) commercial paper, prior to or concurrently with the consummation of the Merger. The commitment is subject to customary conditions. The foregoing description of the Commitment Letter does not purport to be complete and is qualified in its entirety by reference to the full text of the Commitment Letter, which is attached hereto as Exhibit 10.2 and is incorporated herein by reference.

Completion of the Merger is subject to customary closing conditions, including (1) the adoption of the Merger Agreement by a majority of the holders of the outstanding shares of Celgene common stock, (2) approval of the issuance of BMS common stock issued in the Merger by a majority of the votes cast by BMS stockholders on the matter, (3) approval for listing on the New York Stock Exchange of BMS common stock and the CVRs to be issued in the Merger, (4) the expiration or early termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the approval of the Merger under the antitrust laws of other specified jurisdictions, (5) accuracy of the other party’s representations and warranties, subject to certain materiality standards set forth in the Merger Agreement and (6) compliance in all material respects with the other party’s obligations under the Merger Agreement.

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