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3M (MMM) Commences Split-Off Exchange Offer for Food Safety Business

August 4, 2022 12:42 PM EDT

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3M Company ("3M") (NYSE: MMM) announced today the commencement of an exchange offer to effect the separation of its food safety business (the "Food Safety Business"), in furtherance of the previously announced Reverse Morris Trust transaction with Neogen Corporation ("Neogen") (NASDAQ: NEOG) through the merger of Garden SpinCo Corporation ("SpinCo"), currently a wholly-owned subsidiary of 3M formed to hold the Food Safety Business, with a subsidiary of Neogen (the "Merger").

Key elements of the exchange offer include:

  • 3M stockholders have the option to exchange some, all or none of their shares of 3M common stock for shares of common stock of SpinCo, subject to proration as described below. Shares of SpinCo common stock will convert automatically into the right to receive shares of Neogen common stock at the closing of the Merger, which is expected to occur promptly after completion of the exchange offer.
  • Tendering 3M stockholders are expected to receive approximately $107.53 of Neogen common stock for every $100.00 of shares of 3M common stock tendered and accepted in the exchange offer, subject to the upper limit described below.
  • 3M will determine the prices at which shares of 3M common stock and shares of SpinCo common stock (and ultimately shares of Neogen common stock) will be exchanged by reference to the simple arithmetic average of the daily volume-weighted average prices of shares of 3M common stock on the New York Stock Exchange and shares of Neogen common stock on the Nasdaq Global Select Market on each of the last three full trading days ending on and including the second full trading day prior to the expiration date of the exchange offer (which are currently expected to be August 25, August 26 and August 29, 2022).
  • 3M currently expects that approximately 108.3 million shares of SpinCo common stock will be available in the exchange offer, with the final number dependent on the number of outstanding shares of Neogen common stock outstanding immediately prior to the closing of the Merger. The number of shares of 3M common stock that will be accepted in the exchange offer will depend on the final exchange ratio, the number of shares of SpinCo common stock offered and the number of shares of 3M common stock tendered. Based on recent trading prices of shares of 3M common stock and Neogen common stock, and assuming the issuance of 108.3 million shares of SpinCo common stock, if the exchange offer were fully subscribed, approximately 15.7 million shares of 3M common stock would be accepted for exchange in the exchange offer.
  • The exchange offer and withdrawal rights are scheduled to expire at 11:59 p.m., New York City time, on August 31, 2022, unless the exchange offer is extended or terminated.

The exchange offer is designed to permit 3M stockholders to exchange all or a portion of their shares of 3M common stock for shares of SpinCo common stock (which will convert into shares of Neogen common stock) at a discount of 7% to the per-share value of Neogen common stock, subject to an upper limit of 7.3515 shares of SpinCo common stock per share of 3M common stock.

Shares of SpinCo common stock will not be transferred to participants in the exchange offer. Promptly following the consummation of the exchange offer, a subsidiary of Neogen will be merged with and into SpinCo and SpinCo will become a wholly-owned subsidiary of Neogen. As a result of the Merger, each share of SpinCo common stock (except for certain excluded shares) will be converted into one share of Neogen common stock. No separate trading market currently exists or will exist for shares of SpinCo common stock.

The aggregate number of shares of Neogen common stock to be issued in the proposed transaction by Neogen will result in holders of shares of SpinCo common stock prior to the consummation of the proposed transaction collectively owning approximately 50.1% of the outstanding shares of Neogen common stock and holders of Neogen common stock prior to the consummation of the proposed transaction owning approximately 49.9% of the outstanding shares.

3M will announce the final exchange ratio used to determine the number of shares of SpinCo common stock that 3M stockholders participating in the exchange offer will receive for each share of 3M common stock accepted for exchange, as well as whether the upper limit will be in effect, through www.3mneogenexchange.com and by press release, no later than 11:59 p.m., New York City time, on the second full trading day prior to the expiration date of the exchange offer (currently expected to be August 29, 2022, unless the exchange offer is terminated or extended).

The exchange offer will expire at 11:59 p.m., New York City time, on August 31, 2022, unless terminated or extended, and the closing of the merger of the Neogen subsidiary with and into SpinCo is expected to occur promptly following the consummation of the exchange offer. The transactions are subject to customary closing conditions, including Neogen shareholder approval. Neogen has scheduled a special meeting of shareholders to be held on August 17, 2022 to approve the issuance of shares of Neogen common stock in the proposed transaction and certain other transaction-related proposals. The number of outstanding shares of 3M common stock will be reduced as a result of the exchange offer if the exchange offer is consummated.

The exchange offer will be subject to proration if the exchange offer is oversubscribed, and the number of shares of 3M common stock accepted in the exchange offer may be fewer than the number of shares of 3M common stock tendered.

If the exchange offer is consummated but is not fully subscribed, 3M will distribute the remaining shares of SpinCo Common Stock owned by 3M on a pro rata basis to 3M stockholders whose shares of 3M Common Stock remain outstanding after completion of the exchange offer, with a record date expected to be the close of business on August 31, 2022.

If the exchange offer is terminated by 3M without the exchange of shares (but the conditions to consummation of the proposed transaction have otherwise been satisfied), 3M intends to distribute all shares of SpinCo common stock owned by 3M on a pro rata basis to holders of shares of 3M common stock, with a record date to be announced by 3M.

For more information about the exchange offer, please contact the information agent, Georgeson LLC, at 1290 Avenue of the Americas, 9th Floor, New York, NY 10104 or at the telephone number 888-607-6511 (toll-free in the United States).



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