Biomet has accepted an increased take-private offer of $11.4 billion (€8.4 billion) backed by private equity firms Kohlberg Kravis Roberts, The Blackstone Group, Goldman Sachs Capital Partners and TPG.
The consortium’s previous offer of $10.9 billion, accepted by the orthopedic products company in December, was last month criticized for being too low by a shareholder advisory group. One of Biomet’s largest shareholders, Peter Schoenfeld, the chief executive of New York-based hedge fund P Schoenfeld Asset Management, also said the original offer was too low, Bloomberg reported.
Biomet shareholders were expected to vote on the offer at a special meeting Friday; the meeting has now been cancelled in light of the revised offer.
Under terms of the amended agreement, shareholders will receive $46 per Biomet share in cash, equivalent to a 32.3 percent premium over Biomet’s closing price on 3 April 2006, the day preceding speculation of a possible buyout. The consortium will begin a tender offer on or before 14 June to acquire all outstanding Biomet shares, the firms said in a statement.
“We believe the proposed price for the transaction is fair to Biomet’s shareholders,” Niles Noblitt, Biomet’s board chairman, said in a statement. “We also believe that the investor group’s tender offer will deliver superior value to Biomet’s shareholders in a more efficient and more immediate fashion than the process provided by the original merger agreement. Moreover, this revised offer provides greater certainty and visibility to completion of the transaction.”
Morgan Stanley is acting as financial advisor to Biomet and its board. Kirkland & Ellis is providing legal counsel to Biomet, while Simpson Thacher & Bartlett is providing legal counsel to the independent directors of Biomet’s board. Banc of America Securities and Goldman Sachs are acting as financial advisors to the private equity consortium, while Cleary Gottlieb Steen & Hamilton is providing legal counsel.