Eckert & Ziegler announces offer to Board to Acquire Theragenics
March 17, 2011
Seneffe - Belgium, March 17, 2011, Eckert & Ziegler Strahlen- und Medizintechnik AG (Reuters: EUZ.DE), the majority shareholder of IBt Bebig, (Reuters: IBTH.BR - Bloomberg: IBTB BB) has announced today that it has submitted a non-binding proposal to the Board of Directors of Theragenics Corporation (NYSE: TGX), based in Buford, Georgia, USA to acquire, either directly or through IBt Bebig, all the outstanding shares of Theragenics for $2.20 per share, in cash. The offer represents a total equity value of approximately $74 million and a premium of 38.4% over Theragenics' closing stock price on March 16, 2011. The offer also represents a premium of 15.8% over the 52 week high trading price of Theragenics stock.
The non-binding offer, which was made on February 8, 2011, and rejected by Theragenics on March 11, 2011, was reiterated in a letter sent today to Theragenics' Board of Directors. Theragenics has been unwilling to engage in discussions with Eckert & Ziegler. Eckert & Ziegler is disclosing the contents of its letter and non-binding offer in order to inform Theragenics' shareholders of the significant shareholder value and compelling strategic fit inherent in a combination of the two companies.
Eckert & Ziegler has named Canaccord Genuity, based in Boston, Massachusetts, USA, as its U.S. Financial advisor and Equinet Bank AG, based in Frankfurt, Germany, as its European Financial advisor. Eckert & Ziegler has secured several support letters from major financial institutions and is confident of its ability to finance the transaction.
"We believe this proposed combination provides superior value to our respective shareholders and will enable us to offer better products, better services and innovation to our customers," said Dr. Andreas Eckert, CEO of Eckert & Ziegler and Chairman of the Board of IBt Bebig. "We continue to believe that our all cash offer of $2.20 per share is a highly welcome and fair exit for shareholders of Theragenics. We are disappointed that the Theragenics Board of Directors has thus far refused to engage in a discussion of acceptable terms. However we remain committed to the transaction and are prepared to consider all alternatives to successfully complete this transaction."
No decisions have been taken about the final form and structure that a combination of the two radiation therapy businesses might have. The Executive Directors and the Board of IBt Bebig, however, have been closely involved in the Eckert & Ziegler discussions regarding Theragenics and support an integration of the Theragenics businesses into the IBt Bebig structures.
At this stage, there can also be no assurance that any agreement could be reached between the Eckert & Ziegler AG and Theragenics. Neither the letters to the Theragenics' Board of Directors nor this press release constitute an offer to the Theragenics' shareholders nor do they constitute a statement of current intention to commence a tender offer to the Theragenics shareholders.
"Since the merger of IBt and Bebig that started in 2008, our strategy is to create a true international Group with a strong ambition to become a world leader in Brachytherapy. With this planned acquisition we would move one step forward, as we would re-enter in the United States, the largest brachytherapy market. We are the best strategic partner to expand the potential of Theragenics and together broaden the product portfolio with our SmartSeed® and MultiSource® Afterloader", commented Dr. Edgar Löffler Managing Director of IBt Bebig.
Permanent Brachytherapy has faced strong competition in recent years from more expensive alternative treatment options, including Intensity Modulated Radiation Therapy (IMRT) and Robotic Surgery. As health care costs are rising and are a key concern in most countries, the Management of IBt Bebig sees a real opportunity to further promote Permanent Brachytherapy, a minimally invasive one day procedure, as an effective and economical treatment option.
"We have great respect for Theragenics, one of the leading Brachytherapy companies in the US. We have known them a long time, since IBt was founded in 1996 by a few former Theragenics Executives. We have the same vision, that Brachytherapy is a well tolerated treatment option to cure cancer and aligned to patient requirements. Our combined company will be uniquely positioned to further promote this efficient and economical treatment option worldwide", commented Dr. Gunnar Mann, Managing Director of IBt Bebig.
The complete text of Eckert & Ziegler's letter to the Theragenics Board and Theragenics response to our original offer is set forth below. The original letters can be downloaded at:
Contributing to saving lives!
IBt Bebig, the Therapy affiliate of Eckert & Ziegler AG, is a European-based group active in the medical device sector of the health care industry.
Its core business is the treatment of cancer by brachytherapy, a special form of radiotherapy. IBt Bebig is a leader in brachytherapy in Europe and is headquartered in Belgium. It has a production facility in Germany and subsidiaries throughout Europe, as well as in India. IBt Bebig has also established a worldwide network of distributors and agents to support its product line.
The company's products and equipment are intended for use by oncologists, radiologists, urologists, and medical physicists.
IBt Bebig employs more than 150 people. It has been listed on the Euronext stock exchange since April 1997 (Reuters: IBTH.BR - Bloomberg: IBTB BB).
Vice President Business Development & Capital Markets, IBt Bebig
Special Counsel to the CEO, Eckert & Ziegler AG
Copy of letter from Theragenics Corp. dated March 11, 2011
March 11, 2011-03-17
Dr. Andreas Eckert
Eckert & Ziegler Strahlen- und Medizintechnik AG
D-13125 Berlin - Germany
Re: Theragenics Corporation
Dear Dr. Eckert,
The Board of Directors of Theragenics Corporation has evaluated your letter dated February 8, 2011 outlining your proposal to acquire all of the outstanding shares of Theragenics common stock for $2.20 per share in cash.
After careful and thorough evaluation of your proposal and the limited information provided regarding your financing plan, and with the assistance of our financial and legal advisors, our Board has determined that your proposal grossly undervalues our business and prospects, and therefore is inadequate and not in the best interests of Theragenics and its stockholders. Our Board has unanimously determined that it is not advisable for Theragenics to pursue a sale of the Company at this time. Based on the foregoing, the Board believes that it is highly unlikely that further discussions with you would results in a proposal that is in the best interests of Theragenics and its stockholders. Therefore, our Board has also unanimously determined not to pursue your proposal further and will continue to focus on our business and executing our strategic plan.
Very truly yours,
M. Christine Jacobs
Chairman of the Board
Copy of letter from Eckert & Ziegler, dated March 17, 2011
Ladies and Gentlemen:
As you are aware, we are very interested in pursuing an acquisition opportunity with your company and we regret that you have refused to engage in any discussions whatsoever regarding a potential combination and, by your letter of March 11, 2011, rejected our offer of February 8, 2011. Having been unsuccessful in moving forward privately, due to your unwillingness to engage in any discussion, we believe that the opportunities for our respective companies are so compelling that it is important to make our proposal public, which we are doing contemporaneously herewith.
Eckert & Ziegler, either directly or through an affiliate (such as IBt Bebig) or subsidiary, is offering to acquire all of the issued and outstanding shares of the common stock (the "Common Stock") of Theragenics Corporation, a Delaware corporation (the "Company"), for $2.20 per share of Common Stock, payable in cash, subject to the terms and conditions set forth below (the "Offer"). This price, which represents a total equity value of approximately $74 million, would represent a premium of 38.4% over the closing price per share of the Common Stock on March 16, 2011. The offer also represents a premium of 15.8% over Theragenics' 52 week high trading price. We believe the Offer represents a significant opportunity for Theragenics shareholders to realize a premium on their investment, rather than remain subject to the significant market and execution risk associated with the long term standalone business prospects of Theragenics. In addition, we believe that, if Eckert & Ziegler were provided the opportunity to conduct limited due diligence with respect to Theragenics business, in particular its Surgical Products segment, we could be in a position to increase the Offer. Your refusal to engage in any negotiated process whatsoever currently precludes such a possibility.
Our board of directors unanimously supports a combination with the Company. We have been working extensively with legal, accounting and financial advisors and financing sources to be in a position to move forward with the Offer expeditiously. We and our counsel believe that there are no regulatory impediments to consummating the Offer, and our proposal is not subject to a financing condition.
The Offer is conditioned upon and subject to: (i) the redemption by the Company's board of direc-tors of the amended and restated stockholder rights plan described in the Company's Registration Statement on Form 8-A filed with the Securities and Exchange Commission on February 16, 2007; (ii) the waiver by the Company's board of directors of the applicable provisions of Section 203 of the Delaware General Corporation Law; (iii) the negotiation, execution and delivery of a definitive acquisition agreement, in mutually satisfactory form (the "Acquisition Agreement"); and (iv) the requisite approval, if any, by any governmental or regulatory agencies to the transaction contem-plated by this letter and the obtaining of all other necessary and agreed upon material third party consents.
We believe the rationale for this combination is clear. Eckert & Ziegler, which is publicly traded in the prime standard of the Frankfurt Stock Exchange (FSE) as well as on all other German Stock Exchanges, is a globally active isotope technology company with gross sales of $134 million in 2009 and $148 million in 2010. Through our consolidated subsidiaries, we process radioisotopes as well as develop, manufacture and sell isotope technology components, medical technology equipment and related products. Major areas of application for our products include medical equipment, especially for cancer therapy, as well as medical nuclear imaging, radiopharmaceuticals and industrial metrology. Due to our familiarity with these industries and products, we believe that we are well-positioned to integrate the Company's brachytherapy seed business with our global product offerings and significantly expand this business through our existing global marketing and distribution channels.
Having been unable to engage in any substantive discussions with the Company's board of direc-tors and management (beyond our meeting on February 8, 2011), we believe it is in the best inter-ests of the Company's stockholders to know of this proposal. We do not currently plan, and this letter does not constitute, evidence of an intention to commence a tender offer for all of the out-standing shares of the Company's Common Stock and/or to engage in a solicitation of proxies in support of a slate of directors that we would nominate for election to the Company's board of directors that will better appreciate this opportunity, although we reserve the right to do so in the future.
This letter does not constitute or create, and shall not be deemed to constitute or create, any legally binding or enforceable obligation on the part of any party. No such obligation shall be created, except by the signing and delivery of the Acquisition Agreement, containing such terms of the proposed transaction as shall be agreed upon by the parties, and then only in accordance with the terms and conditions of such Acquisition Agreement.
We urge a timely response and favorable consideration. Accordingly, we request that you respond to us by 5:00 p.m. EST, on Friday, March 25, 2011.
Very truly yours,
Dr. Andreas Eckert Dr. Edgar Löffler
Chairman of the Board Member of the Board
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