Item 8.01. Other Events.
Litigation Relating to the Arrangement
As previously disclosed, on August 20, 2021, Trillium Therapeutics Inc., a
corporation existing under the laws of the Province of British Columbia
("Trillium") entered into a definitive arrangement agreement (the "Arrangement
Agreement") with Pfizer Inc., a Delaware corporation and PF Argentum Acquisition
ULC, a corporation formed under the laws of the Province of British Columbia
("Purchaser"), under which Purchaser will acquire all of the issued and
outstanding common shares and preferred shares (collectively, the "Shares") of
Trillium not owned by Purchaser and its affiliates for $18.50 per Share in cash,
by way of a plan of arrangement under the Business Corporations Act (British
Columbia) (the "Arrangement").
On September 28, 2021, in connection with the Arrangement, a complaint, Fishwick
v. Trillium Therapeutics Inc., et al., 1:21-cv-08036, was filed by purported
Trillium shareholder Craig Fishwick against Trillium and its board of directors
in the U.S. District Court for the Southern District of New York. Additional
cases were filed by purported individual shareholders in the same court against
the same defendants between September 28, 2021 and October 15, 2021, captioned
Genovese v. Trillium Therapeutics Inc., et al., 1:21-cv-08061, Accad v. Trillium
Therapeutics Inc., et al., 1:21-cv-08089, Presley v. Trillium Therapeutics Inc.,
et al., 1:21-cv-08216, Parshall v. Trillium Therapeutics Inc., et al.,
1:21-cv-08454, Jones v. Trillium Therapeutics Inc., et al., 1:21-cv-08472, and
Smith v. Trillium Therapeutics Inc., et al., 1:21-cv-08520. On October 15, 2021,
a similar complaint, Hughes v. Trillium Therapeutics Inc. et al., 1:21-cv-05768,
was filed in the U.S. District Court for the Eastern District of New York. Also
on October 15, 2021, a similar complaint, Whitfield v. Trillium Therapeutics
Inc., et al., 2:21-cv-04534, was filed in the U.S. District Court for the
Eastern District of Pennsylvania.
The Fishwick, Genovese, Accad, Presley, Parshall, Jones, Smith, Hughes, and
Whitfield cases are collectively referred to as the "Arrangement actions." The
Arrangement actions generally allege that the Schedule 14A Definitive Proxy
Statement filed by Trillium with the Securities and Exchange Commission (the
"SEC") on September 27, 2021 (the "Definitive Proxy Statement") misrepresents
and/or omits certain purportedly material information relating to financial
projections, the analyses performed by Centerview Partners LLC, and potential
conflicts of interest of Trillium's officers and directors. The Arrangement
actions assert violations of Section 14(a) of the Securities Exchange Act of
1934 (the "Exchange Act") and Rule 14a-9 promulgated thereunder against Trillium
and its directors and violations of Section 20(a) of the Exchange Act against
Trillium's board of directors. The Arrangement actions seek, among other things:
an injunction enjoining consummation of the Arrangement, rescission of the
Arrangement agreement, damages, costs of the action, including plaintiff's
attorneys' fees and experts' fees and expenses, a declaration that Trillium and
its directors violated Sections 14(a) and 20(a) of the Exchange Act and Rule
14a-9 promulgated thereunder, and any other relief the court may deem just and
proper. Trillium believes that the claims asserted in the Arrangement actions
are without merit.
It is possible that additional similar complaints could be filed in connection
with the Arrangement.
While Trillium believes that the disclosures set forth in the Definitive Proxy
Statement comply fully with all applicable law and denies the allegations in the
Arrangement actions, in order to moot plaintiffs' disclosure claims, avoid
nuisance and possible expense and business delays, and provide additional
information to its stockholders, Trillium has determined voluntarily to
supplement certain disclosures in the Definitive Proxy Statement related to
plaintiffs' claims with the supplemental disclosures set forth below (the
"Supplemental Disclosures"). Nothing in the Supplemental Disclosures shall be
deemed an admission of the legal merit, necessity or materiality under
applicable laws of any of the disclosures set forth herein. To the contrary,
Trillium specifically denies all allegations in the Arrangement actions that any
additional disclosure was or is required or material.
All page references used herein refer to pages in the Definitive Proxy Statement
before any additions or deletions resulting from the Supplemental Disclosures,
and capitalized terms used below, unless otherwise defined, have the meanings
set forth in the Definitive Proxy Statement. Underlined and bolded text shows
text being added to a referenced disclosure in the Definitive Proxy Statement
and stricken-through text shows text being deleted from a referenced disclosure
in the Definitive Proxy Statement. Except as specifically noted herein, the
information set forth in the Definitive Proxy Statement remains unchanged.
Supplemental Disclosures to Definitive Proxy Statement
The disclosure under the heading "Selected Public Company Analysis" is hereby
amended and supplemented by replacing the third full paragraph on page 32 of the
Definitive Proxy Statement in its entirety with the following:
Based on its analysis and other considerations that Centerview deemed relevant
in its professional judgment and experience, Centerview selected a reference
range of Enterprise Values for Trillium of $500 million to $1.5 billion. In
selecting this range of Enterprise Values, Centerview made qualitative judgments
based on its experience and professional judgment concerning differences between
the business, financial and operating characteristics of Trillium and the
selected companies that could affect their public trading values in order to
provide a context in which to consider the results of the quantitative analysis.
Applying this range of Enterprise Values, adding to it Trillium's net cash and
cash equivalents of $265 million as of June 30, 2021, as set forth in the
Internal Data, and subtracting the estimated settlement value of the
6.47 million outstanding Warrants, as set forth in the Internal Data, and
dividing by the number of fully-diluted outstanding Shares (calculated based on
approximately 104.8 million Common Shares, approximately 6.8 million First
Preferred Shares, approximately 1.2 million deferred stock units and, determined
using the treasury stock method, the dilutive impact of approximately 6.0
million and taking into account outstanding in-the-money options with a weighted
average exercise price of $8.09) as of August 18, 2021, as set forth in the
Internal Data, resulted in an implied per share equity value range for the
Common Shares of approximately $6.35 to $14.50, rounded to the nearest $0.05.
Centerview then compared this range to the consideration to be paid to the
holders of Common Shares (other than Excluded Shares) of $18.50 per Common
Share.
The disclosure under the heading "Other Factors" is hereby amended and
supplemented by replacing the sixth full paragraph on page 34 of the Definitive
Proxy Statement in its entirety with the following:
Analyst Price Target Analysis: Centerview reviewed share price targets for the
Common Shares in selected publicly available Wall Street research analyst
reports as of August 20, 2021, and observed which indicated low and high price
targets ranging from $14.00 to $24.00 per Common Share from seven Wall Street
analysts; and
The disclosure under the heading "Other Factors" is hereby amended and
supplemented by replacing the seventh full paragraph on page 34 of the
Definitive Proxy Statement in its entirety with the following:
Premiums Paid Analysis: Centerview performed an analysis of premiums paid in
sixteen selected transactions from January 2017 through June 2021 involving
publicly traded biopharmaceutical companies for which premium data was
available. The premiums in this analysis were calculated by comparing the per
share acquisition price in each transaction (excluding any contingent
consideration) to the closing price of the target company's common shares for
the date one day prior to the date on which the trading price of the target's
common shares was perceived to be affected by a potential transaction,
reflecting a range of premiums of 20% to 172% and a median premium of 79%. Based
on the analysis above and other considerations that Centerview deemed relevant
in its professional judgment, Centerview applied a range of 65% to 95% to
Trillium's closing share price on August 20, 2021 (the last trading day before
the public announcement of the Arrangement) of $6.09, which resulted in an
implied price range of approximately $10.05 to $11.90 per Common Share, rounded
to the nearest $0.05.
Cautionary Note Regarding Forward-Looking Statements
To the extent any statements made in this report contain information that is not
historical, these statements are forward-looking statements within the meaning
of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E
of the U.S. Securities Exchange Act of 1934, as amended, and forward-looking
information under Canadian securities law (collectively, "forward-looking
statements"). Certain statements in this report may constitute forward-looking
statements, which reflect the expectations of Trillium's management regarding
the business prospects and opportunities of Trillium and the Arrangement. The
use of words such as "may," "will," "could," "should," "expects," "intends,"
"plans," "anticipates," "believes," "estimates," "predicts," "projects,"
"seeks," "endeavor," "potential," "continue" or the negative of such words or
other similar expressions can be used to identify forward-looking statements.
Trillium's actual results could differ materially from those stated or implied
in forward-looking statements due to a number of factors including but not
limited to risks related to the satisfaction or waiver of the conditions to
closing the proposed transaction (including the failure to obtain necessary
regulatory, court and Trillium's securityholder approvals) in the anticipated
timeframe or at all, including the possibility that the proposed transaction
does not close; the response of business partners and competitors to the
announcement of the proposed transaction, and/or potential difficulties in
employee retention as a result of the announcement and pendency of the proposed
transaction; significant transaction costs; and unknown liabilities and the risk
of litigation and/or regulatory actions related to the proposed transaction.
Please also refer to the factors discussed under "Risk Factors" and "Special
Note Regarding Forward-looking Information" in Trillium's Annual Report on Form
10-K for the year ended December 31, 2020, with the SEC, each as updated by
Trillium's continuous disclosure filings, which are available at www.sec.gov and
at www.sedar.com.
Forward-looking statements involve significant risks and uncertainties, should
not be read as guarantees of future performance or results, and will not
necessarily be accurate indications of whether or not or the times at or by
which such performance or results will be achieved. All forward-looking
statements herein are qualified in their entirety by this cautionary statement
and are made as of the date of this document. Trillium disclaims any obligation
to revise or update any such forward-looking statements or to publicly announce
the result of any revisions to any of the forward-looking statements contained
herein to reflect future results, events or developments, except as required by
law.
Additional Information about the Arrangement and Where to Find It
This communication is not intended to and does not constitute an offer to sell
or the solicitation of an offer to subscribe for or buy or an invitation to
purchase or subscribe for any securities or the solicitation of any vote,
consent or approval in any jurisdiction, nor shall there by any sale, issuance
or transfer of securities in any jurisdiction in contravention of applicable
law. This communication has been prepared in respect of the transaction
involving Trillium, Pfizer and Purchaser pursuant to the terms of the
Arrangement Agreement, and may be deemed to be soliciting material relating to
the transaction. In connection with the transaction, Trillium filed the
definitive management information circular and proxy statement relating to a
special meeting of the securityholders with the SEC and Canadian Securities
Administrators ("CSA") on September 27, 2021. Additionally, Trillium may file
other relevant materials in connection with the transaction with the SEC.
Securityholders of Trillium are urged to read the definitive management
information circular and proxy statement and/or consent solicitation documents
regarding the transaction and any other relevant materials that may be filed
with the SEC, as well as any amendments or supplements to these documents,
carefully in their entirety before making any voting or investment decision with
respect to the transaction because they contain or will contain important
information about the transaction and the parties to the Arrangement Agreement.
The definitive management information circular and proxy statement was first
mailed to holders of Trillium's securityholders on or about October 4, 2021.
Securityholders will be able to obtain a copy of the definitive management
information circular and proxy statement, as well as other filings containing
information about the transaction and the parties to the Arrangement Agreement
made by Trillium with the SEC and CSA free of charge on EDGAR at www.sec.gov, on
SEDAR at www.sedar.com, or on Trillium's website at
www.trilliumtherapeutics.com. Information contained on, or that may be accessed
through, the websites referenced in this communication is not incorporated into
and does not constitute a part of this document. We have included these website
addresses only as inactive textual references and do not intend them to be
active links.
Participants in the Solicitation
Trillium and its directors and executive officers may be deemed to be
participants in the solicitation of proxies from the securityholders of Trillium
in respect of the transaction. Information about Trillium's directors and
executive officers is set forth in the proxy statement and management
information circular for Trillium's Annual General and Special Meeting of
Shareholders, which was filed with the SEC and CSA on April 30, 2021. Investors
may obtain additional information regarding the interest of such participants by
reading the definitive management information circular and proxy statement and
other relevant materials to be filed with the SEC regarding the Arrangement.
Investors and stockholders should read the definitive management information
circular and proxy statement carefully before making any voting or investment
decisions. Investors may obtain free copies of these documents using the sources
indicated above.
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