SEC Form SC 13D/A filed by Pardes Biosciences Inc. (Amendment)

 

 

 

 

 

 

Upon the unanimous recommendation of a Special Committee (the “Special Committee”) of the Issuer’s Board of Directors (the “Board”), the Board has determined that the terms of the Offer, the Merger and the other transactions are fair to and in the best interests of the Issuer and the unaffiliated stockholders, approved the execution of the Merger Agreement and, subject to the terms and conditions of the Merger Agreement, recommended that the unaffiliated stockholders accept the Offer and tender their shares of Common Stock pursuant to the Offer. Under the Merger Agreement, Parent is required to commence the Offer no later than 10 business days after the date of the Merger Agreement. The Offer will expire at one minute after 11:59 p.m., Eastern time, on the date that is 20 business days following the commencement date of the Offer, unless extended in accordance with the terms of the Offer and the Merger Agreement and the applicable rules and regulations of the SEC.

Pursuant to the terms of the Merger Agreement, as of the effective time of the Merger (the “Effective Time”), by virtue of the Merger and without any action on the part of the holders, (i) each outstanding share of Common Stock of the Issuer (other than any shares of Common Stock held in the treasury of the Issuer, owned, directly or indirectly, by Parent, Merger Sub or any subsidiary of Parent, irrevocably accepted for purchase in the Offer or by any stockholders who are entitled to and who properly exercise appraisal rights under Delaware law) will be converted into the right to receive the Offer Price, (ii) the vesting of each option to purchase shares of Common Stock from the Issuer (“Company Options”) shall be accelerated and (A) each Company Option that has an exercise price per share that is less than the Cash Amount (each, an “In-the-Money Option”) that is then outstanding will be cancelled and, in exchange therefor, the holder of such cancelled In-the-Money Option will be entitled to receive in consideration of the cancellation of such In-the-Money Option, (1) an amount in cash, without any interest thereon and subject to applicable tax withholding, equal to the product of (x) the total number of shares of Common Stock subject to such In-the-Money Option as of immediately prior to the Effective Time multiplied by (y) the excess of the Cash Amount over the applicable exercise price per share under such In-the-Money Option and (2) one CVR for each share of Common Stock subject thereto and (B) each Company Option that is not an In-the-Money Option will be cancelled for no consideration.

Pursuant to the terms of the Merger Agreement, prior to the closing time of the Offer (the “Offer Closing Time”), each share of the Issuer’s unvested restricted stock (the “Restricted Shares”) that is then outstanding shall become immediately vested in full. At the Effective Time, each Restricted Share that is then outstanding shall be cancelled and the holder of each such share shall be entitled to receive (i) the Cash Amount, less applicable tax withholding and (ii) one CVR.

Concurrently with the execution of the Merger Agreement, and as a condition and inducement to the Issuer’s willingness to enter into the Merger Agreement and the CVR Agreement, Foresite Capital Opportunity Fund V, L.P., Foresite Capital Fund V, L.P. and FS Development Holdings II, LLC, affiliates of Parent, have duly executed and delivered to the Issuer a limited guaranty, dated as of the date of the Merger Agreement, in favor of the Issuer and holders of the CVRs, in respect of certain of Parent and the Merger Sub’s obligations arising under, or in connection with, the Merger Agreement and CVR Agreement. The obligations under the limited guaranty are subject to a cap of $7.5 million under the Merger Agreement and $400,000 under the CVR Agreement.