Item 1.01 Entry into a Material Definitive Agreement.
On February 3, 2021, GW Pharmaceuticals plc, a public limited company
incorporated in England and Wales (the "Company"), entered into a Transaction
Agreement (the "Transaction Agreement") with Jazz Pharmaceuticals Public Limited
Company, a public limited company incorporated in Ireland ("Jazz"), and Jazz
Pharmaceuticals UK Holdings Limited, a private limited company incorporated in
England and Wales and a wholly owned subsidiary of Jazz ("Bidco").
The Transaction Agreement provides, among other things, that subject to the
satisfaction or waiver of the conditions set forth therein, Bidco will acquire
the entire issued share capital of the Company pursuant to a scheme of
arrangement under Part 26 of the U.K. Companies Act 2006 (the "Scheme of
Arrangement" and such acquisition, the "Transaction").
Under the Transaction Agreement, at the effective time of the Scheme of
Arrangement (the "Effective Time"), all ordinary shares, par value £0.001 per
share ("Company Ordinary Shares"), issued and outstanding as of the Effective
Time will be transferred to Bidco, and the holders of Company Ordinary Shares
will have the right to receive, for each such share (a) $16.662/3 in cash and
(b) an amount of Jazz ordinary shares, par value $0.0001 per share ("Jazz
Ordinary Shares"), equal to the Exchange Ratio (as defined below). Because each
American Depositary Share in the Company represents a beneficial interest in 12
Company Ordinary Shares ("Company ADS"), holders of Company ADSs will be
entitled to receive 12 times the foregoing cash and share amounts per Company
ADS, being (1) $200 in cash and (2) an amount of Jazz Ordinary Shares equal to
12 times the Exchange Ratio.
"Exchange Ratio" means:
• If the Jupiter Share Price (as defined below) is an amount greater than
$139.72 but less than $170.76, the Exchange Ratio will be an amount equal
to the quotient obtained by dividing (x) $1.662/3 by (y) the Jupiter
Share Price;
• If the Jupiter Share Price is an amount equal to or less than $139.72,
the Exchange Ratio will be 0.011929; or
• If the Jupiter Share Price is an amount equal to or greater than $170.76,
the Exchange Ratio will be 0.009760.
"Jupiter Share Price" means the volume-weighted average sales price of a Jupiter
Ordinary Share on The Nasdaq Global Select Market for the consecutive period of
15 trading days beginning on the 18th trading day immediately preceding the
closing date and ending on the fourth trading day immediately preceding the
closing date of the Transaction.
Conditions to the Transaction
The respective obligations of the Company and Jazz to consummate the Transaction
are subject to the satisfaction or waiver of a number of customary conditions,
including: (1) approval by the Company's shareholders of the Scheme of
Arrangement and the passing of the special resolution to amend the Company
organizational documents and other related matters; (2) certain regulatory
approvals, including expiration or early termination of the applicable waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended; (3) compliance by the other party in all material respects with such
other party's obligations under the Transaction Agreement; (4) accuracy of the
other party's representations and warranties, subject to certain materiality
standards set forth in the Transaction Agreement; (5) sanction of the Scheme of
Arrangement by the High Court of Justice of England and Wales (the "Court");
(6) the absence of any law or order prohibiting consummation of the Transaction;
and (7) the Jazz Ordinary Shares issuable in the Transaction having been
approved for listing on Nasdaq. The consummation of the Transaction is not
subject to any condition that Jazz obtain any financing, but in certain
circumstances closing of the Transaction may be delayed if a 15 consecutive
business day marketing period shall not have been afforded to Jazz at the time
closing otherwise would have occurred.
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Representations and Warranties; Covenants
The Transaction Agreement contains customary representations and warranties
given by the Company and Jazz. The Transaction Agreement also contains customary
pre-closing covenants, including the obligation of the Company to conduct its
business in the ordinary course of business and covenants by each of the parties
to refrain from taking specified actions without the consent of the other party.
The parties have agreed to use their respective reasonable best efforts to
complete the Transaction as promptly as reasonably practicable, including in
obtaining each third party consent or regulatory approval necessary, proper or
advisable to complete the Transaction. The Transaction Agreement also provides
that, during the period from the date of the Transaction Agreement until the
Effective Time, the Company is subject to certain restrictions on its ability to
solicit alternative acquisition proposals from third parties, to provide
information to third parties, to engage in discussions with third parties
regarding alternative acquisition proposals or to change the recommendation of
the Company's board in favor of the Transaction, subject to customary
exceptions.
Treatment of Equity Awards
Under the Transaction Agreement, at the Effective Time; all options to purchase
Company ADS's or ordinary shares, as applicable, that are then held by Company
employees (other than those Company options granted in 2021 to employees) and
Company non-employee members of the Company board, will vest and be canceled at
the Effective Time, in exchange for an all-cash payment equal to the
"in-the-money" value of the option, based on the value of the Transaction
consideration. In addition, each option to purchase Company ADSs granted in 2021
will become vested as to one-third of the award at the Effective Time and will
be treated in accordance with the previous sentence, and the remaining
two-thirds of the grant will be converted into an option to acquire Jazz
Ordinary Shares (with performance-based Company options converting into time
vesting options with any performance goals deemed fully satisfied as of the
Effective Time), half of which will vest on the first anniversary of the
original grant and half of which will vest on the second anniversary of the
original grant, subject to accelerated vesting in connection with qualifying
terminations of employment. The number of Jazz Ordinary Shares that will
underlie each converted Jazz option will be determined by multiplying the equity
award exchange ratio described in the Transaction Agreement by the number of
Company ADSs subject to the 2021 Company option, and the Jazz option exercise
price will be determined by dividing the 2021 Company option exercise price by
the same equity award exchange ratio.
Termination and Termination Fees
The Transaction Agreement contains certain customary termination rights,
including, among others, if (1) the Transaction is not completed by August 3,
2021, subject to up to two, three month automatic extensions in certain
circumstances, (2) a governmental authority of competent jurisdiction has issued
a final non-appealable governmental order prohibiting the Transaction, (3) the
Company's shareholders do not provide the requisite approvals for the
Transaction at the applicable shareholder meetings or (4) the Court declined or
refused to sanction the Transaction. In addition, Jazz may terminate the
Transaction Agreement in certain circumstances, including if (a) the Company's
board has changed its recommendation in favor of the Transaction or recommends
in favor of an alternative transaction, (b) a willful breach of the Company's
non-solicitation obligations or certain of its obligations relating to
implementation of the Scheme of Arrangement, the proxy statement and the Company
shareholder meetings, (c) following the commencement of a takeover, tender or
exchange offer related to Company securities, the Company's board does not
communicate to its shareholders, within 10 business days of the commencement of
such offer (or earlier in certain circumstances), that it recommends rejecting
such takeover, tender or exchange offer or (d) following a material uncured
breach by the Company of its representations or covenants that would cause a
closing condition to not be satisfied. The Company may terminate the Transaction
Agreement in certain circumstances, including (1) following a material uncured
breach by Jazz of its representations or covenants that would cause a closing
condition to not be satisfied and (2) in order to enter into a definitive
agreement providing for a "superior proposal."
Under the Transaction Agreement, the Company will be required to make a cash
payment to Jazz equal to $71.5 million if the Transaction Agreement is
terminated in certain circumstances, including (1) in the circumstances
described in clauses (a), (b) and (c) in the preceding paragraph; (2) if the
Company's shareholders do not approve the Transaction at the applicable
shareholder meetings and (i) an alternative acquisition proposal has been
publicly announced and not publicly withdrawn without qualification at least
four business days prior to the shareholder
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meetings and (ii) within 12 months from termination the Company enters into a
definitive agreement with respect to, or consummates, an alternative
transaction; or (3) if the Court declines or refuses to sanction the Scheme of
Arrangement, if the Company shall have communicated to the Court at the hearing
. . .
Item 7.01 Regulation FD Disclosure.
On February 3, 2021, the Company and Jazz posted an investor presentation
regarding the Transaction. A copy of the investor presentation is furnished as
Exhibit 99.1 here to.
The information in this Item 7.01, including Exhibit 99.1 hereto, shall not be
deemed "filed" for purposes of Section 18 of the Exchange Act, or otherwise
subject to the liability of that section, nor shall it be deemed incorporated by
reference in any of the Company's filings under the Securities Act of 1933, as
amended, or the Exchange Act, whether made before or after the date hereof,
except as expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
Number Description of Exhibit
2.1 Transaction Agreement, dated as of February 3, 2021, by and among GW
Pharmaceuticals plc, Jazz Pharmaceuticals UK Holdings Limited and Jazz
Pharmaceuticals Public Limited Company.*
99.1 Investor Presentation, dated February 3, 2021
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
* Schedules and exhibits have been omitted pursuant to Item
601(b)(2) of Regulation S-K. The Company agrees to furnish supplementally to
the U.S. Securities and Exchange Commission a copy of any omitted schedule or
exhibit upon request.
* * *
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Additional Information and Where to Find It
In connection with the proposed transaction, GW Pharmaceuticals intends to file
a proxy statement with the SEC. Each of Jazz Pharmaceuticals and GW
Pharmaceuticals may also file other relevant documents with the SEC regarding
the proposed transaction. The definitive proxy statement (if and when available)
will be mailed to shareholders of GW Pharmaceuticals. INVESTORS AND SECURITY
HOLDERS ARE URGED TO READ THE PROXY STATEMENT (WHICH WILL INCLUDE AN EXPLANATORY
STATEMENT IN RESPECT OF THE SCHEME OF ARRANGEMENT OF GW PHARMACEUTICALS, IN
ACCORDANCE WITH THE REQUIREMENTS OF THE U.K. COMPANIES ACT 2006) AND ANY OTHER
RELEVANT DOCUMENTS THAT MAY BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR
SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY IF AND WHEN THEY
BECOME AVAILABLE BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION
ABOUT THE PROPOSED TRANSACTION.
Investors and security holders will be able to obtain free copies of the proxy
statement (if and when available) and other documents containing important
information about Jazz Pharmaceuticals, GW Pharmaceuticals and the proposed
transaction, once such documents are filed with the SEC through the website
maintained by the SEC at http://www.sec.gov. Copies of the documents filed with
the SEC by Jazz Pharmaceuticals will be available free of charge on Jazz
Pharmaceuticals' website at https://www.jazzpharma.com. Copies of the documents
filed with the SEC by GW Pharmaceuticals will be available free of charge on GW
Pharmaceuticals' website at https://www.gwpharm.com.
Forward-Looking Statements
This communication contains forward-looking statements regarding Jazz
Pharmaceuticals and GW Pharmaceuticals, including, but not limited to,
statements related to the proposed acquisition of GW Pharmaceuticals and the
anticipated timing, results and benefits thereof; and other statements that are
not historical facts. You can generally identify forward-looking statements by
the use of forward-looking terminology such as "anticipate," "believe,"
"continue," "could," "estimate," "expect," "explore," "evaluate," "intend,"
"may," "might," "plan," "potential," "predict," "project," "seek," "should," or
"will," or the negative thereof or other variations thereon or comparable
terminology. These forward-looking statements are based on each of the
companies' current plans, objectives, estimates, expectations and intentions and
inherently involve significant risks and uncertainties, many of which are beyond
Jazz Pharmaceuticals' or GW Pharmaceuticals' control. Actual results and the
timing of events could differ materially from those anticipated in such
forward-looking statements as a result of these risks and uncertainties, which
include, without limitation, risks and uncertainties associated with: Jazz
Pharmaceuticals' and GW Pharmaceuticals' ability to complete the acquisition on
the proposed terms or on the anticipated timeline, or at all, including risks
and uncertainties related to securing the necessary regulatory and shareholder
approvals, the sanction of the High Court of Justice of England and Wales and
satisfaction of other closing conditions to consummate the acquisition; the
occurrence of any event, change or other circumstance that could give rise to
the termination of the definitive transaction agreement relating to the proposed
transaction; risks related to diverting the attention of GW Pharmaceuticals and
Jazz Pharmaceuticals management from ongoing business operations; failure to
realize the expected benefits of the acquisition; significant transaction costs
and/or unknown or inestimable liabilities; the risk of shareholder litigation in
connection with the proposed transaction, including resulting expense or delay;
the risk that GW Pharmaceuticals' business will not be integrated successfully
or that such integration may be more difficult, time-consuming or costly than
expected; Jazz Pharmaceuticals' ability to obtain the expected financing to
consummate the acquisition; risks related to future opportunities and plans for
the combined company, including the uncertainty of expected future regulatory
filings, financial performance and results of the combined company following
completion of the acquisition; GW Pharmaceuticals' dependence on the successful
commercialization of Epidiolex/Epidyolex and the uncertain market potential of
Epidiolex; pharmaceutical product development and the uncertainty of clinical
success; the regulatory approval process, including the risks that GW
Pharmaceuticals may be unable to submit anticipated regulatory filings on the
timeframe anticipated, or at all, or that GW Pharmaceuticals may be unable to
obtain regulatory approvals of any of its product candidates, including
nabiximols and Epidiolex for additional indications, in a timely manner or at
all; disruption from the proposed acquisition, making it more difficult to
conduct business as usual or maintain relationships with customers, employees or
suppliers; effects relating to the announcement of the acquisition or any
further announcements or the consummation of the acquisition on the market price
of Jazz Pharmaceuticals' ordinary shares or GW Pharmaceuticals' American
depositary shares or ordinary shares; the possibility that, if Jazz
Pharmaceuticals does not achieve the perceived
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benefits of the acquisition as rapidly or to the extent anticipated by financial
analysts or investors, the market price of Jazz Pharmaceuticals' ordinary shares
could decline; potential litigation associated with the possible acquisition;
regulatory initiatives and changes in tax laws; market volatility; and other
risks and uncertainties affecting Jazz Pharmaceuticals and GW Pharmaceuticals,
including those described from time to time under the caption "Risk Factors" and
elsewhere in Jazz Pharmaceuticals' and GW Pharmaceuticals' Securities and
Exchange Commission (SEC) filings and reports, including Jazz Pharmaceuticals'
Annual Report on Form 10-K for the year ended December 31, 2019 and Quarterly
Report on Form 10-Q for the quarter ended September 30, 2020, GW
Pharmaceuticals' Annual Report on Form 10-K for the year ended December 31, 2019
and Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, and
future filings and reports by either company. In addition, while Jazz
Pharmaceuticals and GW Pharmaceuticals expect the COVID-19 pandemic to continue
to adversely affect their respective business operations and financial results,
the extent of the impact on the combined company's ability to generate sales of
and revenues from its approved products, execute on new product launches, its
clinical development and regulatory efforts, its corporate development
objectives and the value of and market for its ordinary shares, will depend on
future developments that are highly uncertain and cannot be predicted with
confidence at this time. Moreover, other risks and uncertainties of which Jazz
Pharmaceuticals or GW Pharmaceuticals are not currently aware may also affect
each of the companies' forward-looking statements and may cause actual results
and the timing of events to differ materially from those anticipated. Investors
are cautioned that forward-looking statements are not guarantees of future
performance. The forward-looking statements made in this communication are made
only as of the date hereof or as of the dates indicated in the forward-looking
statements and reflect the views stated therein with respect to future events as
at such dates, even if they are subsequently made available by Jazz
Pharmaceuticals or GW Pharmaceuticals on their respective websites or otherwise.
Neither Jazz Pharmaceuticals nor GW Pharmaceuticals undertakes any obligation to
update or supplement any forward-looking statements to reflect actual results,
new information, future events, changes in its expectations or other
circumstances that exist after the date as of which the forward-looking
statements were made.
Participants in the Solicitation
Jazz Pharmaceuticals, GW Pharmaceuticals, their respective directors and certain
of their executive officers and other employees may be deemed to be participants
in the solicitation of proxies from GW Pharmaceuticals' security holders in
connection with the proposed transaction. Information about GW Pharmaceuticals'
directors and executive officers is set forth in GW Pharmaceuticals' proxy
statement on Schedule 14A for its 2020 Annual General Meeting, which was filed
with the SEC on April 7, 2020, and its Current Report on Form 8-K filed with the
SEC on September 10, 2020 and subsequent statements of beneficial ownership on
file with the SEC. Information about Jazz Pharmaceuticals' directors and
executive officers is set forth in Jazz Pharmaceuticals' proxy statement on
Schedule 14A for its 2020 Annual General Meeting, which was filed with the SEC
on June 12, 2020 and subsequent statements of beneficial ownership on file with
the SEC. Additional information regarding the persons who may, under the rules
of the SEC, be deemed participants in the solicitation of GW Pharmaceuticals
security holders in connection with the proposed transaction, including a
description of their direct or indirect interests, by security holdings or
otherwise, will be set forth in the proxy statement when it is filed with the
SEC.
No Offer or Solicitation
This communication is not intended to and shall not constitute an offer to buy
or sell or the solicitation of an offer to buy or sell any securities, or a
solicitation of any vote or approval, nor shall there be any offer, solicitation
or sale of securities in any jurisdiction in which such offer, solicitation or
sale would be unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offer of securities shall be made
in the United States absent registration under the U.S. Securities Act of 1933,
as amended (Securities Act), or pursuant to an exemption from, or in a
transaction not subject to, such registration requirements. The Jazz
Pharmaceuticals securities issued in the proposed transaction are anticipated to
be issued in reliance upon an available exemption from such registration
requirements pursuant to Section 3(a)(10) of the Securities Act.
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