Notable Mergers and Acquisitions 8/22: (PFE)/(MDVN) (CST) (CIFC) (MOBI)

August 22, 2016 9:46 AM EDT

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*** Pfizer Inc. (NYSE: PFE) and Medivation, Inc. (Nasdaq: MDVN) announced that they have entered into a definitive merger agreement under which Pfizer will acquire Medivation, a biopharmaceutical company focused on developing and commercializing small molecules for oncology, for $81.50 a share in cash for a total enterprise value of approximately $14 billion. The Boards of Directors of both companies have unanimously approved the merger, which is expected to be immediately accretive to Pfizer’s Adjusted Diluted EPS upon closing, approximately $0.05 accretive in the first full year after close with additional accretion and growth anticipated thereafter. Pfizer does not expect the transaction to impact its current 2016 financial guidance.

“The proposed acquisition of Medivation is expected to immediately accelerate revenue growth and drive overall earnings growth potential for Pfizer,” said Ian Read, chairman and chief executive officer, Pfizer. “The addition of Medivation will strengthen Pfizer’s Innovative Health business and accelerate its pathway to a leadership position in oncology, one of our key focus areas, which we believe will drive greater growth and scale of that business over the long-term. This transaction is another example of how we are effectively deploying our capital to generate attractive returns and create shareholder value.”

Medivation’s portfolio includes XTANDI® (enzalutamide), an androgen receptor inhibitor that blocks multiple steps in the androgen receptor signaling pathway within the tumor cell. XTANDI is the leading novel hormone therapy in the United States today and generated approximately $2.2 billion in worldwide net sales over the past four quarters, as recorded by Astellas Pharma Inc., with whom Medivation entered an agreement in 2009 to develop XTANDI globally and commercialize jointly in the U.S. Since its approval for advanced metastatic prostate cancer by the U.S. Food and Drug Administration in 2012, XTANDI has treated 64,000 men to date in the U.S. alone. Medivation and Astellas have built a robust development program for XTANDI, including two Phase 3 studies in non-metastatic prostate cancer and another Phase 3 study in hormone-sensitive prostate cancer. It is also being further developed in Phase 2 studies for the potential treatment of advanced breast cancer and hepatocellular carcinoma.

In addition, Medivation has a promising, wholly-owned, late-stage oncology pipeline, which includes two development-stage oncology assets, talazoparib and pidilizumab. Talazoparib, currently in a Phase 3 study for the treatment of BRCA-mutated breast cancer, has the potential to be a highly potent PARP inhibitor and could be efficacious across several additional tumors. Pidilizumab is an immuno-oncology (IO) asset being developed for diffuse large B-cell lymphoma and other hematologic malignancies and has the potential to be combined with IO therapies in Pfizer’s portfolio.

“We believe the combination with Pfizer is the right next step in our growth trajectory and is a testament to the passion and dedication by which the Medivation team has delivered on our mission to profoundly transform patients’ lives through medically innovative therapies,” said David Hung, M.D., founder, president and CEO of Medivation. “This compelling transaction will deliver significant and immediate value to our stockholders and provides new opportunities for our employees as part of a larger company. We believe that Pfizer is the ideal partner to extend the reach of our blockbuster XTANDI franchise and take our promising, late-stage assets – talazoparib and pidiluzimab – to their next stages of development so that they can be made available to patients as quickly as possible.”

“The proposed acquisition of Medivation will build upon Pfizer’s success with our IBRANCE® (palbociclib) launch in HR+/HER2- metastatic breast cancer and with our strong immuno-oncology portfolio, and will transform Pfizer into a leading oncology company,” said Albert Bourla, group president, Pfizer Innovative Health. “IBRANCE and XTANDI are anchor brands in breast and prostate cancer respectively, giving Pfizer leadership in two hormone-driven cancers. Similar to IBRANCE in the breast cancer setting, XTANDI is being explored for its potential to move from metastatic prostate cancer to treat earlier stages of non-metastatic prostate cancer. In addition, Medivation’s portfolio within prostate cancer and across diverse tumors will complement Pfizer’s broad IO portfolio. Finally, Medivation adds commercial scale to better compete with other top tier oncology companies in advance of the potential emergence of Pfizer’s IO pipeline expected in the next few years. Together, we believe Pfizer and Medivation can bring the full force of our combined research and resources to combat two of the most common cancers, as well as speed cures and make accessible breakthrough medicines to patients, redefining life with cancer.”

Cancer remains the second leading cause of death in the U.S. and a “Top 10” killer worldwide. According to the American Cancer Society, breast cancer and prostate cancer are among the top three cancers by annual incidence in the U.S. There are several parallels between breast and prostate cancer, including the incidence of prostate cancer in the U.S., which is similar to that of breast cancer with approximately 280,000 cases per year.

Pfizer expects to finance the transaction with existing cash.

Under the terms of the merger agreement, a subsidiary of Pfizer will commence a cash tender offer to purchase all of the outstanding shares of Medivation common stock for $81.50 per share, net to the seller in cash, without interest, subject to any required withholding of taxes. The closing of the tender offer is subject to customary closing conditions, including U.S. antitrust clearance and the tender of a majority of the outstanding shares of Medivation common stock. The merger agreement contemplates that Pfizer will acquire any shares of Medivation that are not tendered into the offer through a second-step merger, which will be completed promptly following the closing of the tender offer. Pfizer expects to complete the acquisition in the Third- or Fourth-Quarter 2016.

Pfizer’s financial advisors for the transaction were Guggenheim Securities and Centerview Partners, with Ropes & Gray LLP acting as its legal advisor. J.P. Morgan Securities and Evercore served as Medivation’s financial advisors, while Cooley LLP and Wachtell, Lipton, Rosen & Katz served as its legal advisors.

*** CST Brands, Inc. (NYSE: CST) announced that its Board of Directors has unanimously approved a definitive merger agreement with Alimentation Couche-Tard Inc., under which Couche-Tard will acquire all of the shares of CST for $48.53 per share in cash, representing a total enterprise value of approximately $4.4 billion, including the assumption of net debt.

The transaction value represents a premium of approximately 42 percent to CST’s closing stock price on March 3, 2016, the last date prior to CST announcing that its Board commenced an exploration of strategic alternatives to further enhance stockholder value. The transaction also represents a premium of approximately 61 percent since May 1, 2013, the last date prior to regular way trading of CST following the Company’s spin off.

Couche-Tard is a global leader in the convenience and fuel retail industry, with a strong Circle K brand across the U.S. Together, Couche-Tard and CST will join on the journey to become the world’s preferred destination for convenience and fuel.

“After the Board’s comprehensive review of strategic alternatives to enhance stockholder value, we are pleased to reach this agreement with Couche-Tard, which we expect to provide immediate and compelling value to our stockholders,” said Kim Lubel, Chairman, Chief Executive Officer and President of CST. “Our Board believes that Couche-Tard is an ideal partner for CST. With Couche-Tard, we will build upon an extensive and attractive convenience and fuel network with enhanced scale and global reach to best position the combined company for future growth. Importantly, our employees will benefit from new opportunities for career development as part of a larger, global company. We look forward to working closely with Couche-Tard to seamlessly complete the transaction and ensure a smooth integration.”

New Circle K Division in San Antonio

Upon completion of the transaction, Circle K will establish a new business unit in San Antonio with attached shared services operations.

Transaction Details and Approvals

Couche-Tard expects to finance the transaction with available cash, its existing credit facilities and a new term loan. The transaction is currently expected to close early calendar year 2017, subject to the approval of CST's stockholders and regulatory approvals in the United States and Canada.


BofA Merrill Lynch is serving as lead financial advisor and J.P. Morgan Chase is also serving as financial advisor to CST. Wachtell, Lipton, Rosen & Katz and Stikeman Elliott are acting as legal advisors to CST.

*** CIFC LLC (Nasdaq: CIFC) announced that CIFC and an affiliate of F.A.B. have entered into a definitive merger agreement under which F.A.B. will acquire CIFC for approximately $333 million in cash.

Under the terms of the merger agreement, CIFC shareholders will be entitled to receive $11.46 in cash per share – $11.36 per share as consideration in the merger, plus a $0.10 per share distribution detailed below – representing a premium of more than 60% over CIFC's closing share price on August 19, 2016, and a premium of approximately 160% over the January 27, 2016 closing share price, the day prior to CIFC's announcement of its pursuit of strategic alternatives to accelerate the growth of its business. The CIFC Board has declared a cash distribution of $0.10 per share to be paid on September 12, 2016 to shareholders of record as of the close of business on August 31, 2016.

Founded in 2005 and based in New York, CIFC is a $14 billion private debt manager specializing in U.S. corporate loan strategies. CIFC has over 75 employees, including more than 30 dedicated investment professionals. The firm serves more than 200 institutional investors globally and is one of the largest managers of collateralized loan obligations ("CLOs") in North America.

F.A.B. is a global alternative investment platform that focuses on originating, structuring and actively managing investments across geographies and asset classes. F.A.B. was founded by Michele Faissola, Dalinc Ariburnu and Nizar Al-Bassam, each of whom has significant capital markets and investment management experience.

Jeffrey S. Serota, Chairman of CIFC's Board, stated: "We are pleased to have reached this agreement with F.A.B., which follows a thorough review of strategic and financial alternatives that generated interest from over a dozen suitors. Our Board concluded that this offer maximizes value for our shareholders and is in the best interests of our investors and clients."

Stephen Vaccaro, Co-President and Chief Investment Officer of CIFC, added, "We have spent the past 10 years building a robust and scalable U.S. private debt business. With the support of F.A.B., our company embarks on a new chapter of growth and product line expansion. We are thrilled to be able to tap into the extensive experience F.A.B. can contribute to our platform and regard F.A.B. as ideally positioned to help CIFC serve its clients, broaden its product offerings and achieve new milestones."

"CIFC is a leading private debt investment platform and one of the largest CLO managers in the industry and we are thrilled that this acquisition marks our first foray into the U.S. credit markets," said Michele Faissola, Co-Founding Partner of F.A.B. "CIFC's highly experienced investment team, institutional infrastructure and blue-chip client base, make them an ideal partner for us as we look to access the U.S. market for our clients. Our clients are committed to capitalizing on both current and future investment opportunities in the U.S. and we view CIFC as our beachhead into these exciting opportunities."

Nizar Al-Bassam, Co-Founding Partner of F.A.B., added, "With this acquisition, we are thrilled to be backing a strong management team which we have gotten to know well throughout the strategic process. The depth and breadth of the team Steve and his partner, Oliver Wriedt, have built was a key consideration in our decision to choose the CIFC platform as our first major investment geared at accessing the U.S. market. We are looking forward to working alongside them to lead CIFC through its next phase of growth and development."

F.A.B. has secured the capital backing for the acquisition of CIFC from Supreme Universal Holdings Ltd, a company controlled by Qatar's royal family.

The transaction has been approved by CIFC's Board of Directors. Columbus Nova, CIFC's majority shareholder, has agreed to vote its shares in favor of the transaction. The transaction, which is subject to approval by CIFC's shareholders, the satisfaction of certain regulatory approvals and other customary closing conditions, is expected to close this calendar year.

J.P. Morgan Securities LLC is serving as exclusive financial advisor to CIFC and Dechert LLP and Latham & Watkins LLP are serving as legal counsel. Moelis & Company LLC is acting as exclusive financial advisor to F.A.B., and Weil, Gotshal & Manges LLP and Ernst & Young LLP are serving as legal advisor and accounting & tax advisor, respectively.

*** Sky-mobi Limited (Nasdaq: MOBI) announced that it has entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Amber Shining Investment Limited (“Parent”), an exempted company with limited liability incorporated under the laws of the Cayman Islands and Power Rich Limited (“Merger Sub”), an exempted company with limited liability incorporated under the laws of the Cayman Islands and a wholly-owned subsidiary of Parent.

Subject to satisfaction of the Merger Agreement’s terms and conditions, Merger Sub will merge with and into the Company, with the Company continuing as the surviving corporation and a wholly-owned subsidiary of Parent (the “Merger”). Pursuant to the Merger Agreement, at the effective time of the Merger, each of the Company’s common shares (including the Company’s common shares in the form of American depositary shares, or “ADSs”, each representing eight common shares) issued and outstanding immediately prior to the effective time of the Merger (the “Shares”) will be cancelled and cease to exist in exchange for the right to receive US$0.275 per Share or US$2.2 per ADS, in each case, in cash and without interest, except for (a) Shares, including such Shares represented by the ADSs, held by Mr. Michael Tao Song, chairman and chief executive officer of Sky-mobi, Xplane Limited and Mobi Joy Limited (collectively, the “Rollover Holders”), Parent (together with the Rollover Holders and the Merger Sub, the “Buyer Group”), the Company or any of their subsidiaries, which will be cancelled and cease to exist and no payment or distribution will be made with respect thereto and (b) Shares held by shareholders who have validly exercised and not effectively withdrawn or lost their rights to dissent from the Merger pursuant to Section 238 of the Companies Law of the Cayman Islands, which will be cancelled and cease to exist in exchange for the right to receive the payment resulting from the procedure set forth in Section 238 of the Companies Law of the Cayman Islands. The consideration of the Merger represents a premium of 25% over the Company’s closing price of US$1.76 per ADS on June 22, 2016, the last trading day prior to the Company’s announcement of its receipt of a “going-private” proposal.

The Buyer Group intends to fund the Merger with the proceeds from a committed loan facility in the amount of US$40 million arranged by China Merchants Bank Co., Ltd., New York Branch, pursuant to a debt commitment letter dated as of today.

The Company’s board of directors (the “Board”), acting upon the unanimous recommendation of a special committee of disinterested directors that are unaffiliated with Parent or Merger Sub (and that are not members of the Company’s management) (the “Special Committee”), authorized and approved the Merger Agreement and the Merger and resolved to recommend that the Company’s shareholders vote to authorize and approve the Merger Agreement and the Merger. The Special Committee negotiated the terms of the Merger Agreement with the assistance of its independent financial and legal advisors.

The consummation of the Merger is subject to customary closing conditions, including the approval of the Merger Agreement by an affirmative vote of holders of at least two-thirds of the Shares present and voting in person or by proxy at a meeting of the Company’s shareholders which will be convened to consider the approval of the Merger Agreement and the Merger. The Rollover Holders have entered into a support agreement pursuant to which each has agreed, among other things, to vote all of his or its Shares in favor of the authorization and approval of the Merger Agreement and the Merger. If completed, the Merger will result in the Company becoming a privately-held company and its ADSs will no longer be listed on the NASDAQ Global Market.

In connection with the Merger, Roth Capital Partners, LLC is serving as a financial advisor to the Special Committee; Orrick, Herrington & Sutcliffe LLP is serving as U.S. legal advisor to the Special Committee; Conyers Dill & Pearman is serving as Cayman Islands legal advisor to the Special Committee; and Cleary Gottlieb Steen & Hamilton LLP is serving as U.S. legal advisor to the Company.

Gibson, Dunn & Crutcher LLP is serving as U.S. legal advisor to the Buyer Group; and Walkers is serving as Cayman Islands legal advisor to the Buyer Group.

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