Sec Form 13D Filing - Sanofi filing for Translate Bio Inc. (TBIO) - 2021-08-12

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The total amount of funds required to consummate the Offer (as defined below) and purchase all of the outstanding Shares (not already owned by the Reporting Person) in the Offer and provide funding in connection with the Merger (as defined below) is expected to be approximately $3.2 billion, plus related fees and expenses. The Reporting Person expects to fund these payments with cash on hand.

On August 2, 2021, Sanofi, Vector Merger Sub, Inc., a Delaware corporation and an indirect wholly owned subsidiary of Sanofi (“Merger Sub”), and the Issuer entered into an Agreement and Plan of Merger (the “Merger Agreement”) pursuant to which Sanofi has agreed to cause Merger Sub to commence a cash tender offer (the “Offer”) to purchase all of the Shares, at a price of $38.00 per share in cash (the “Offer Price”), net to the seller in cash, without interest and subject to withholding taxes required by applicable legal requirements. The obligation of Merger Sub to purchase Shares tendered in the Offer is subject to the conditions set forth in the Merger Agreement, including (1) that the number of Shares validly tendered in accordance with the terms of the Offer and not validly withdrawn, considered together with all other Shares otherwise beneficially owned by Sanofi or any of its wholly owned subsidiaries (including Merger Sub) (but excluding Shares tendered pursuant to guaranteed delivery procedures that have not yet been received, as defined by Section 251(h)(6) of the Delaware General Corporation Law (the “DGCL”)), would represent one more than 50% of the total number of Shares outstanding at the time of the expiration of the Offer, (2) the absence of any injunction or other order issued by a court of competent jurisdiction or law prohibiting consummation of the Offer or the Merger, (3) the expiration or early termination of the applicable waiting period (or any extension thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (4) the accuracy of the Company’s representations and warranties, subject to certain materiality standards set forth in the Merger Agreement, and (5) compliance by the Company in all material respects with its obligations under the Merger Agreement and (6) the absence of a Material Adverse Effect (as defined in the Merger Agreement).

Following the completion of the Offer and subject to the satisfaction or waiver of certain conditions set forth in the Merger Agreement, Merger Sub will merge with and into the Company, with the Company continuing as the surviving corporation and as an indirect wholly owned subsidiary of Sanofi (the “Merger”). The Company, Sanofi and Merger Sub will effect the Merger after consummation of the Offer pursuant to Section 251(h) of the DGCL. At the effective time of the Merger (the “Effective Time”), the Shares then outstanding (other than Shares (1) held by the Company (or in the Company’s treasury), Sanofi or any direct or indirect wholly owned subsidiary of Sanofi (other than Merger Sub), or by stockholders of the Company who have properly exercised and perfected their statutory rights of appra isal under Delaware law, or (2) irrevocably accepted for purchase in the Offer) will each be converted into the right to receive an amount in cash equal to the Offer Price (the “Merger Consideration”), without interest and subject to any withholding of taxes required by applicable legal requirements.

Each of the stock options issued by the Company (the “Company Options”) that is outstanding as of immediately prior to the Effective Time will accelerate and become fully vested and exercisable effective immediately prior to, and contingent upon, the Effective Time.  As of the Effective Time (i) each Company Option that is then outstanding and unexercised will be cancelled and converted into the right to receive cash in an amount equal to the total number of shares subject to the Company Option immediately prior to the Effective Time multiplied by the excess (if any) of the Merger Consideration over the exercise price payable per share under such Company Option, and (ii) each restricted stock unit award granted pursuant to any of the Company equity plans or otherwise (“Company RSUs”) that is then outstanding will be cancelled and converted into the right to receive cash in an amount equal to the number of shares issuable in settlement of the Company RSU immediately prior to the Effective Time multiplied by the Merger Consideration for each share issuable in settlement of such Company RSU immediately prior to the Effective Time.

The Merger Agreement includes a remedy of specific performance for the Company, Sanofi and Merger Sub. The Merger Agreement includes termination provisions for both the Company and Sanofi and provides that, in connection with the termination of the Merger Agreement under specified circumstances, including termination by the Company in order to accept and enter into a definitive agreement with respect to a Superior Offer (as defined in the Merger Agreement), the Company will be required to pay a termination fee to Sanofi of an amount in cash equal to $96 million. Any such termination of the Merger Agreement by the Company is subject to certain conditions, including the Company’s compliance with certain process and notice requirements.

In connection with entering into the Merger Agreement, Sanofi and the Company entered into a (i) Tender and Support Agreement (the “Baupost Tender and Support Agreement”), dated as of August 2, 2021, with Baupost Group Securities, L.L.C. (“Baupost”) and (ii) Tender and Support Agreement (the “Renaud Tender and Support Agreement”), dated as of August 2, 2021, with Ronald C. Renaud, Jr., The Ronald C. Renaud, Jr. Trust–2007, and Ronald Renaud 2014 Irrevocable Family Trust (collectively, “Renaud” and, together with Baupost, the “Supporting Stockholders”).  The Baupost Tender and Support Agreement and the Renaud Tender and Support Agreement (collectively, the “Tender and Support Agreements”) provide that, no later than eight business days after the commencement of the Offer, the Supporting Stockholders will tender into the Offer, and not withdraw, all outstanding Shares the Supporting Stockholders beneficially owned as of the date of the Tender and Support Agreements and any Shares acquired thereafter through the Expiration Date (as defined in the Tender and Support Agreements) (collectively, the “Subject Shares”).  Pursuant to the Tender and Support Agreements and until the Expiration Date, the Supporting Stockholders also have agreed, among other things, subject to certain exceptions (i) to refrain from disposing of the Subject Shares and soliciting alternative proposals to the Merger and (ii) to vote the Subject Shares against certain alternative corporate transactions, each as more fully described in the Tender and Support Agreements.  Based upon information provided by the Supporting Stockholders in the Tender and Support Agreements, as of August 2, 2021: (a) Baupost beneficially owned 18,044,239 Shares; (b) Ronald C. Renaud, Jr., beneficially owned 503,231 Shares and Company Options pursuant to which 2,511,205 Shares are subject to issuance upon exercise; (c) The Ronald C. Renaud, Jr. Trust–2007 beneficially owned 40,909 Shares; and (d) Ronald Renaud 2014 Irrevocable Family Trust beneficially owned 409,913 Shares.

The purpose of the Offer is for Sanofi, through Merger Sub, to acquire control of, and would be the first step in Sanofi’s acquisition of the entire equity interest in, the Company. The Offer is intended to facilitate the acquisition of all outstanding Shares. The purpose of the Merger is to acquire all outstanding Shares not tendered and purchased pursuant to the Offer.  If the Offer is consummated, Merger Sub intends to complete the Merger as promptly as practicable thereafter subject to the satisfaction and waiver of the other conditions to Merger set forth in the Merger Agreement.  After completion of the Offer and the Merger, the Company will be a wholly owned indirect subsidiary of Sanofi.  At the Effective Time, among other things, (i) the certificate of incorporation of the Company will be amended and restated, (ii) the bylaws of Merger Sub as in effect immediately prior to the Effective Time will be the bylaws of the Company from and after the Effective Time, and (iii) the directors and officers of Merger Sub immediately prior to the Effective Time will be the initial directors and officers of the Company.  Following the Merger, the Shares will no longer be traded on the NASDAQ Global Select Stock Market, there will be no public market for the Common Stock, and registration of the Common Stock under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) will be terminated.

The foregoing descriptions of the Merger Agreement and the Tender and Support Agreements do not purport to be complete and are qualified in their entirety by reference to such agreements.  A copy of the Merger Agreement, listed as Exhibit 1 hereto, is incorporated by reference to Exhibit 2.1 to the Issuer’s Current Report on Form 8-K filed with the SEC on August 3, 2021. Copies of the Tender and Support Agreements, listed as Exhibits 2 and 3 hereto, are incorporated by reference to Exhibits 99.1 and 99.2 to the Issuer’s Current Report on Form 8-K filed with the SEC on August 3, 2021. The Merger Agreement contains representations, warranties and covenants, which were made only for the purposes of such agreement and as of specific dates, were made solely for the benefit of the parties to the Merger Agreement (and, in the case of certain covenants relating to indemnification of directors and officers, for the benefit of directors and officers of the Company designated as third-party beneficiaries), and are intended not as statements of fact, but rather as a way of allocating risk to one of the parties if those statements prove to be inaccurate. In addition, such representations, warranties and covenants may have been qualified by certain disclosures in confidential disclosure schedules delivered by the Company to Sanofi and Merger Sub in connection with the signing of the Merger Agreement, and may apply standards of materiality in a way that is different from what may be viewed as material by stockholders of, or other investors in, the Company.

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