Biomet Inc on Thursday accepted a sweetened takeover bid of $11.4 billion from a group of private equity firms after a influential shareholder advisory firm urged the orthopedic device maker's shareholders to reject a previous $10.9 billion offer.
The private equity consortium, which includes affiliates of Blackstone Group, Goldman Sachs Capital Partners, Kohlberg Kravis Roberts & Co and TPG, will begin a tender offer by June 14 to acquire all of Biomet's outstanding shares.
Completion of the tender offer is subject to the condition that at least 75 per cent of the Biomet common shares have been tendered.
Biomet cancelled a June 8 special meeting of shareholders scheduled to vote on the original takeover offer. As part of the revised merger agreement, Biomet has agreed not to pay its annual dividend.
Last month, Institutional Shareholder Services recommended that Biomet shareholders vote against the original $10.9 billion bid, saying the price was too low.
The fundamentals of the hip and knee reconstruction market had improved and shares of Biomet's peers have rallied, ISS said in a report.
"Although the deal terms appear fair as of the time of the deal's announcement in December, the rally of the peer group" and its main joint reconstruction business "imply that there is little takeover premium in the current $44 offer price," the ISS report said.
{{/usCountry}}"Although the deal terms appear fair as of the time of the deal's announcement in December, the rally of the peer group" and its main joint reconstruction business "imply that there is little takeover premium in the current $44 offer price," the ISS report said.
{{/usCountry}}Morgan Stanley, which served as financial adviser to Biomet, told Biomet's board that, as of June 6, the revised offer was fair from a financial point, Biomet said.
"Our offer empowers current shareholders who have an economic interest in Biomet common shares to realise significant value in a timely manner and represents the absolute limit of our ability to structure an appropriate buyout of Biomet," the buyout group said in a statement.
Banc of America Securities and Goldman Sachs & Co advised the private equity group.