Coventry (CVH) Could Pay $167.5M, Aetna (AET) Up to $450M in Termination Fees Under Certain Circumstances
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More details were disclosed in the Aetna (NYSE: AET)/Coventry Health (NYSE: CVH) deal, as announced earlier. The following relates to fees that each would pay in event of an early termination. The passage is from an SEC 8-K filing made moments ago:
"If the Merger Agreement is terminated under certain circumstances, including, among others: a change in the recommendation of Coventry’s board of directors that Coventry’s stockholders approve and adopt the Merger Agreement; a failure of Coventry’s stockholders to approve and adopt the Merger Agreement upon a vote taken thereon after Coventry’s board of directors has changed its recommendation; or in connection with the Company’s entrance into a definitive agreement providing for a Superior Proposal, then Coventry would be required to pay Aetna a termination fee of $167.5 million. If the Merger Agreement is terminated because Coventry’s stockholders have not approved and adopted the Merger Agreement upon a vote taken thereon and Coventry’s board has not changed its recommendation, but a proposal for an alternative transaction was publicly announced and not withdrawn before the stockholder meeting, then Coventry would be required to pay Aetna 25% of this $167.5 million termination fee (with the remaining 75% payable to Aetna if, and only if, Coventry enters into an agreement providing for, or consummates, an alternative transaction within 12 months of such termination).
In the event the Merger Agreement is terminated: as a result of the failure of the Merger to occur on or before the end date (as it may be extended) due to the failure to achieve antitrust or other specified regulatory approvals; as a result of a final and non-appealable order or injunction relating to antitrust or other specified regulatory approvals; or as a result of Aetna’s failure to take appropriate proceedings to fight an order or injunction in respect of antitrust or other specified regulatory matters within certain specified time periods, then Aetna would be required to pay Coventry a reverse termination fee of $450 million."
For more merger details from the SEC filing, click here.
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"If the Merger Agreement is terminated under certain circumstances, including, among others: a change in the recommendation of Coventry’s board of directors that Coventry’s stockholders approve and adopt the Merger Agreement; a failure of Coventry’s stockholders to approve and adopt the Merger Agreement upon a vote taken thereon after Coventry’s board of directors has changed its recommendation; or in connection with the Company’s entrance into a definitive agreement providing for a Superior Proposal, then Coventry would be required to pay Aetna a termination fee of $167.5 million. If the Merger Agreement is terminated because Coventry’s stockholders have not approved and adopted the Merger Agreement upon a vote taken thereon and Coventry’s board has not changed its recommendation, but a proposal for an alternative transaction was publicly announced and not withdrawn before the stockholder meeting, then Coventry would be required to pay Aetna 25% of this $167.5 million termination fee (with the remaining 75% payable to Aetna if, and only if, Coventry enters into an agreement providing for, or consummates, an alternative transaction within 12 months of such termination).
In the event the Merger Agreement is terminated: as a result of the failure of the Merger to occur on or before the end date (as it may be extended) due to the failure to achieve antitrust or other specified regulatory approvals; as a result of a final and non-appealable order or injunction relating to antitrust or other specified regulatory approvals; or as a result of Aetna’s failure to take appropriate proceedings to fight an order or injunction in respect of antitrust or other specified regulatory matters within certain specified time periods, then Aetna would be required to pay Coventry a reverse termination fee of $450 million."
For more merger details from the SEC filing, click here.
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