McKesson Corporation (NYSE:MCK) today announced that its
previously announced offer to stockholders to exchange their shares
of McKesson common stock on a per-share-basis for 11.4086 shares of
PF2 SpinCo, Inc. (“SpinCo”) common stock expired at 11:59 p.m., New
York City time, on March 9, 2020, and, based on preliminary
results, the exchange offer was oversubscribed. The exchange offer
to split-off SpinCo, which holds McKesson’s interest in Change
Healthcare LLC (“Change Healthcare”), is part of McKesson’s
agreement with Change Healthcare Inc. (NASDAQ:CHNG) (“Change”) to
merge SpinCo with and into Change (the “Merger”).
According to the exchange agent for the exchange offer, Equiniti
Trust Company, 98,165,418 shares of McKesson common stock were
tendered prior to the expiration of the exchange offer, including
65,256,714 shares of McKesson common stock validly tendered and
32,908,704 shares of McKesson common stock that were tendered by
notice of guaranteed delivery. McKesson has accepted 15,426,537 of
the tendered shares of McKesson common stock in exchange for
175,995,192 shares of SpinCo common stock.
Immediately following the consummation of the exchange offer,
and by means of the merger of SpinCo with and into Change, each
outstanding share of SpinCo common stock will be converted into one
share of Change common stock (with cash in lieu of fractional
shares).
Because the exchange offer was oversubscribed, McKesson accepted
tendered shares of McKesson common stock on a pro rata basis in
proportion to the total number of shares tendered and not validly
withdrawn. Stockholders who owned fewer than 100 shares of McKesson
common stock, or an “odd lot,” and who validly tendered all of
their shares are not subject to proration in accordance with the
terms of the exchange offer.
Based on the total number of shares of McKesson common stock
that were reported as tendered prior to the expiration of the
exchange offer, it is estimated that approximately 14.70% of the
tendered shares of McKesson common stock that are subject to
proration will be exchanged for shares of SpinCo common stock,
assuming all shares tendered by guaranteed delivery procedures are
delivered under the terms of the exchange offer. The preliminary
proration factor is subject to change based on the number of
tendered shares that satisfy the guaranteed delivery
procedures.
McKesson expects to announce the final proration factor as soon
as possible following the expiration of the guaranteed delivery
period, which will occur on March 11, 2020. Promptly after the
final proration factor is announced, shares of McKesson common
stock tendered but not accepted for exchange will be returned to
the tendering stockholders in book-entry form. Also at that time,
the exchange agent for the exchange offer will deliver to Change’s
transfer agent a final stockholder list for SpinCo common stock to
be received by tendering McKesson stockholders whose shares were
accepted for exchange in the exchange offer. Change’s transfer
agent will use the final stockholder list to credit such tendering
McKesson stockholders with whole shares of Change common stock.
Fractional shares of Change common stock deliverable to tendering
McKesson common stock holders will be aggregated and sold in the
open market by Change’s transfer agent, or otherwise as reasonably
directed by McKesson within 20 business days after the effective
time of the Merger. Checks in lieu of fractional shares will
thereafter be delivered to such tendering McKesson common stock
stockholders by Change’s transfer agent, after deducting any
required withholding taxes and brokerage charges, commissions and
transfer taxes, on a pro rata basis, without interest, as soon as
practicable.
In connection with the transactions, Goldman Sachs & Co. LLC
is acting as financial advisor and Davis Polk & Wardwell LLP is
acting as legal advisor to McKesson.
Forward-Looking Statements
This press release contains certain statements about McKesson,
SpinCo, Change Healthcare and Change that are “forward-looking
statements” within the meaning of Section 27A of the United States
Securities Act of 1933, as amended, and Section 21E of the United
States Securities Exchange Act of 1934, as amended. These matters
involve risks and uncertainties as discussed in the registration
statement on Form S-4 and S-1 filed by SpinCo in connection with
the Transactions (as defined below) with the U.S. Securities and
Exchange Commission (the “SEC”) (File No. 333-236236) and the
registration statement on Form S-4 filed by Change in connection
with the Transactions with the SEC (File No. 333-236234), as well
as in McKesson’s and Change’s respective periodic reports on Form
10-K and Form 10-Q and current reports on Form 8-K, filed from time
to time with the SEC. The forward-looking statements contained in
this release may include statements about the expected effects on
McKesson, SpinCo and Change of the separation of SpinCo from
McKesson and the merger of SpinCo with and into Change
(collectively, the “Transactions”); the anticipated benefits of the
Transactions and McKesson’s, SpinCo’s, Change Healthcare’s and
Change’s anticipated financial results; and also include all other
statements in this press release that are not historical facts.
Without limitation, any statements preceded or followed by or that
include the words “targets,” “plans,” “believes,” “expects,”
“intends,” “will,” “likely,” “may,” “anticipates,” “estimates,”
“projects,” “should,” “would,” “could,” “positioned,” “strategy,”
“future,” or words, phrases, or terms of similar substance or the
negative thereof, are forward-looking statements. These statements
are based on the current expectations of the management of
McKesson, SpinCo and Change (as the case may be) and are subject to
uncertainty and to changes in circumstances and involve risks and
uncertainties that could cause actual results to differ materially
from those expressed or implied in such forward-looking statements.
In addition, these statements are based on a number of assumptions
that are subject to change. Such risks, uncertainties and
assumptions include, but are not limited to: changes in the
healthcare industry and regulatory environment; fluctuations in
foreign currency exchange rates; material adverse resolution of
pending legal proceedings, including those related to the
distribution of controlled substances; cyberattack, natural
disaster, or malfunction of sophisticated internal computer systems
to perform as designed; the potential inadequacy of insurance to
cover property loss or liability claims; the satisfaction of the
conditions to the Transactions, and other risks related to the
completion of the Transactions and actions related thereto;
McKesson’s and Change’s ability to complete the Transactions on the
anticipated terms and schedule; the anticipated tax treatment of
the Transactions; the expansion and growth of Change’s operations;
ongoing risks related to the price or trading volume of McKesson’s
and Change’s common stock; failure to pay dividends to holders of
McKesson’s or Change’s common stock; impairment charges for
goodwill; and the risk that disruptions from the Transactions will
harm McKesson’s, SpinCo’s, Change Healthcare’s or Change’s
businesses. However, it is not possible to predict or identify all
such factors. Consequently, while the list of factors presented
here is considered representative, no such list should be
considered to be a complete statement of all potential risks and
uncertainties. Unlisted factors may present significant additional
obstacles to the realization of forward-looking statements.
Forward-looking statements included herein are made as of the date
hereof, and none of McKesson, SpinCo, Change Healthcare or Change
undertakes any obligation to update publicly such statements to
reflect subsequent events or circumstances.
About McKesson Corporation
McKesson Corporation is a global leader in healthcare supply
chain management solutions, retail pharmacy, community oncology and
specialty care, and healthcare information technology. McKesson
partners with pharmaceutical manufacturers, providers, pharmacies,
governments and other organizations in healthcare to help provide
the right medicines, medical products and healthcare services to
the right patients at the right time, safely and cost-effectively.
United by our ICARE shared principles, our employees work every day
to innovate and deliver opportunities that make our customers and
partners more successful — all for the better health of patients.
McKesson has been named a “Most Admired Company” in the healthcare
wholesaler category by FORTUNE, a “Best Place to Work” by the Human
Rights Campaign Foundation, and a top military-friendly company by
Military Friendly. For more information, visit
www.mckesson.com.
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version on businesswire.com: https://www.businesswire.com/news/home/20200310005487/en/
Holly Weiss Investors 972-969-9174 Holly.Weiss@McKesson.com
David Matthews Media 214-952-0833 David.Matthews@McKesson.com
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