Zila Merger Agreement with Tolmar Amended to Reflect Higher Stock Price
Tolmar Acquires Zila Senior Secured Notes
SCOTTSDALE, Ariz.--(BUSINESS WIRE)--Zila, Inc. (Nasdaq: ZILA) today announced that its definitive merger agreement with Tolmar Holding, Inc., a privately held, pharmaceutical research, development, manufacturing and commercial operations company, has been amended today to reflect a higher price per share. Under the terms of the revised agreement, Tolmar will acquire, for cash, all of Zila’s common stock for $0.45 per share and preferred stock for $0.50 per share. Zila’s Board of Directors encouraged Tolmar to increase its offer from $0.38 per share of common stock to clearly demonstrate the superiority of its offer over another offer that was contingent upon acquiring Zila’s debt. The proposed merger transaction is subject to customary closing conditions, including approval by Zila’s stockholders, but is not subject to any financing contingency and is no longer dependent upon Tolmar acquiring Zila’s debt.
Zila also said it has received notice from Tolmar that it has purchased all of the Zila senior secured notes from the note holders. Zila was not involved in the decision by Tolmar to acquire the notes at this time. Also today, Tolmar and Zila entered into a forbearance agreement, which subject to certain conditions, prohibits Tolmar from accelerating such notes until November, notwithstanding Zila’s existing interest payment defaults.
David Bethune, Zila’s chairman and CEO, said, “The Zila Board of Directors has continued its efforts to secure the best possible outcome for our stockholders. In the coming days we expect to complete a proxy statement that will provide our stockholders with all the details of the proposed merger and how the voting process works.”
As part of the note purchase Tolmar acquired 435,084 shares of Zila stock, representing approximately 4% of the outstanding common stock, from the note holders with a proxy to vote it in favor of the merger. Zila intends to hold a special meeting of its stockholders as soon as practicable, and the parties anticipate that the proposed merger will close by September. Upon the completion of the proposed merger, Zila will no longer be a publicly traded company.
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