Item 1.01 Entry into a Material Definitive Agreement.
Agreement and Plan of Merger
On May 3, 2020, Stemline Therapeutics, Inc., a Delaware corporation
("Stemline"), entered into an Agreement and Plan of Merger (the "Merger
Agreement") with Berlin-Chemie AG, a company formed under the laws of Germany
("Berlin-Chemie"), and Mercury Merger Sub, Inc., a Delaware corporation and a
wholly-owned subsidiary of Berlin-Chemie ("Purchaser"). Berlin-Chemie is a
wholly-owned subsidiary of A. Menarini - Industrie Farmaceutiche Riunite S.r.l.,
a company formed under the laws of Italy (together, with its subsidiaries, the
"Menarini Group").
Pursuant to the terms and subject to the conditions of the Merger Agreement,
Purchaser will commence a tender offer (the "Offer") no later than May 15, 2020
to acquire all of the outstanding shares of common stock of Stemline, $0.0001
par value per share (the "Shares"), at an offer price of (i) $11.50 per Share,
net to the seller in cash, without interest (the "Cash Amount"), plus (ii) one
contingent value right per Share (a "CVR") which represents the right to receive
$1.00 per CVR (the "Milestone Payment") at the time provided in the CVR
Agreement (as defined below) (the Cash Amount plus one CVR, collectively, the
"Offer Price").
The obligation of Purchaser to purchase Shares tendered in the Offer is subject
to the satisfaction or waiver of a number of conditions set forth in Annex I to
the Merger Agreement, including (i) that there have been validly tendered and
not validly withdrawn Shares that, considered together with all other Shares, if
any, beneficially owned by Berlin-Chemie and its affiliated entities, represent
one Share more than 50% of the total number of Shares outstanding at the time of
the expiration of the Offer (the "Minimum Condition"); (ii) the expiration or
termination of the waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"); and (iii) those other
conditions set forth in Annex I to the Merger Agreement (collectively, the
"Offer Conditions").
The Offer will initially expire at one minute after 11:59 p.m. Eastern Time on
the date that is 20 business days following the commencement of the Offer,
unless otherwise agreed to in writing by Berlin-Chemie and Stemline. If, as of
the then-scheduled expiration date, any Offer Condition is not satisfied or
waived (to the extent waivable), Purchaser may, in its discretion (and without
the consent of Stemline) extend the Offer for additional periods of up to 10
business days per extension, to permit such Offer Condition to be satisfied. If,
as of the then-scheduled expiration date, any Offer Condition is not satisfied
or waived (to the extent waivable), at the request of Stemline, Purchaser will
extend the Offer for additional periods specified by Stemline of up to 10
business days per extension to permit such Offer Condition to be satisfied,
provided that Purchaser will not be required to extend the Offer beyond the
then-existing expiration date for more than three consecutive additional
periods, not to exceed an aggregate of 30 business days if all of the Offer
Conditions have been satisfied or waived other than the Minimum Condition.
Subject to the foregoing and the valid termination of the Merger Agreement,
Purchaser will not terminate the Offer without the prior written consent of
Stemline.
Subject only to the satisfaction or, to the extent waivable by Purchaser or
Berlin-Chemie, waiver by Purchaser or Berlin-Chemie of each of the Offer
Conditions, Purchaser will (i) immediately after the Expiration Date irrevocably
accept for payment all Shares tendered (and not validly withdrawn) pursuant to
the Offer (the time of such acceptance, the "Offer Acceptance Time") and (ii)
promptly after the Offer Acceptance Time pay for such Shares.
At or prior to the Offer Acceptance Time, Berlin-Chemie will duly authorize,
execute and deliver the Contingent Value Rights Agreement in the form attached
as Annex III to the Merger Agreement (the "CVR Agreement").
As soon as practicable following the Offer Acceptance Time, upon the terms and
subject to the conditions set forth in the Merger Agreement and in accordance
with Section 251(h) of the Delaware General Corporation Law (the "DGCL"),
Purchaser will be merged with and into Stemline (the "Merger"), the separate
existence of Purchaser will cease and Stemline will continue as a wholly-owned
subsidiary of Berlin-Chemie, without a meeting or vote of the stockholders of
Stemline. At the effective time of the Merger (the "Effective Time"), the Shares
not purchased pursuant to the Offer (other than Shares held by Stemline,
Berlin-Chemie, Purchaser, any subsidiary of Berlin-Chemie, or by stockholders of
Stemline who have perfected their statutory rights of appraisal under Delaware
law) will each be converted into the right to receive the Offer Price without
interest and subject to any withholding of taxes.
In addition, at the Effective Time, each In-The-Money Company Option, Company
RSU, and Restricted Share (as such terms are defined in the Merger Agreement),
in each case whether or not vested, will be canceled, and the holder thereof
will be entitled to receive the Cash Amount (less any applicable exercise price)
and one CVR for each Share subject to each such security (in each case, without
regard to vesting), pursuant to the terms set forth in the Merger Agreement.
Each Out-Of-The-Money Company Option (as such term is defined in the Merger
Agreement) with an exercise price below $12.50 will be canceled, and the holder
thereof will receive one CVR for each Share subject to such Out-Of-The-Money
Company Option, which, solely in the case of an Out-Of-The-Money Company Option,
represents the right to receive $1.00 less the amount by which the exercise
. . .
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On May 3, 2020, the board of directors of Stemline adopted the Stemline
Therapeutics, Inc. Change in Control Severance Plan (the "CIC Severance Plan"),
which generally provides employees of Stemline and its subsidiaries (other than
employees with employment agreements providing for severance benefits) with
severance payments in the event of a termination of such employee's employment
during the one-year period immediately following a change in control of Stemline
(which will occur upon the consummation of the transactions contemplated by the
Merger Agreement) if such termination is by Stemline without "cause" or by the
employee for "good reason" (as each term is defined in the CIC Severance Plan).
In the event of a qualifying termination of employment, eligible employees are
entitled to between three and nine months of base salary continuation (depending
upon position and tenure), a prorated annual bonus at the target level of
performance for the year of termination, and reimbursement of premiums (at the
active-employee rate) for benefit continuation during the applicable base salary
continuation period. Severance payments and benefits under the CIC Severance
Plan are contingent upon the eligible employee's execution of a release of
claims in favor of Stemline and its affiliates and compliance with certain
post-separation covenants.
On May 3, 2020, the board of directors of Stemline also authorized the
implementation of a change in control retention program. Employees selected to
participate in the program are eligible to receive retention payments on (i) the
closing of the transactions contemplated by the Merger Agreement (20% of the
total retention award), (ii) the six-month anniversary of the closing (30% of
the total retention award) and (iii) the one-year anniversary of the closing
(50% of the total retention award). Participants generally must remain employed
by Stemline upon these vesting dates in order to be entitled to receive the
applicable retention award.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
Year.
On May 3, 2020, the board of directors of Stemline adopted an amendment to
Stemline's existing Amended and Restated Bylaws (the "Bylaws") by adding a new
Section 7.1 containing a forum selection provision (the "Amendment"). Generally,
the Amendment provides that unless Stemline consents in writing to the selection
of an alternative forum (an "Alternative Forum Consent"), the Court of Chancery
of the State of Delaware will be the sole and exclusive forum for (i) any
derivative action or proceeding brought on behalf of Stemline, (ii) any action
asserting a claim of breach of a duty (including any fiduciary duty) owed by any
current or former director, officer, stockholder, employee or agent of Stemline
to Stemline or Stemline's stockholders, (iii) any action asserting a claim
against Stemline or any current or former director, officer, stockholder,
employee or agent of Stemline arising out of or relating to any provision of the
DGCL or Stemline's Certificate of Incorporation or Bylaws (each, as in effect
from time to time), or (iv) any action asserting a claim against Stemline or any
current or former director, officer, stockholder, employee or agent of Stemline
governed by the internal affairs doctrine of the State of Delaware.
This summary is qualified in its entirety by reference to the Amendment to the
Bylaws, dated May 3, 2020, and filed as Exhibit 3.1 hereto and incorporated by
reference herein.
Item 8.01 Other Events.
On May 4, 2020, Stemline and the Menarini Group issued a joint press release
announcing the execution of the Merger Agreement. A copy of the press release is
attached to this Current Report as Exhibit 99.2 and is incorporated herein by
reference.
Notice to Investors and Security Holders
The Offer referred to in this Current Report on Form 8-K (the "Current Report")
has not yet commenced. The description contained in this Current Report is
neither an offer to purchase nor a solicitation of an offer to sell any
securities, nor is it a substitute for the tender offer materials that wholly
owned subsidiaries of the Menarini Group will file with the Securities and
Exchange Commission (the "SEC"). The solicitation and offer to buy Shares will
only be made pursuant to an offer to purchase and related tender offer
materials. At the time the Offer is commenced, wholly owned subsidiaries of the
Menarini Group will file a tender offer statement on Schedule TO and thereafter
Stemline will file a solicitation/recommendation statement on Schedule 14D-9
with the SEC with respect to the Offer. THE TENDER OFFER MATERIALS (INCLUDING AN
OFFER TO PURCHASE, A RELATED LETTER OF TRANSMITTAL AND CERTAIN OTHER OFFER
DOCUMENTS) AND THE SOLICITATION/RECOMMENDATION STATEMENT ON SCHEDULE 14D-9 WILL
CONTAIN IMPORTANT INFORMATION. ANY HOLDERS OF SHARES ARE URGED TO READ THESE
DOCUMENTS CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION THAT HOLDERS SHOULD CONSIDER BEFORE MAKING ANY DECISION
REGARDING TENDERING THEIR SHARES. The offer to purchase, the related letter of
transmittal and the solicitation/recommendation statement will be made available
for free at the SEC's website at www.sec.gov. Additional copies may be obtained
for free by contacting Stemline. Copies of the documents filed with the SEC by
Stemline will be available free of charge on Stemline's internet website at
https://ir.stemline.com/financial-information or by contacting Stemline's
investor relations contact at +1 (646) 502-2307. Copies of the documents filed
with the SEC by wholly owned subsidiaries of the Menarini Group can be obtained,
when filed, free of charge by directing a request to the Information Agent for
the Offer which will be named in the tender offer materials.
In addition to the offer to purchase, the related letter of transmittal and
certain other tender offer documents to be filed by wholly owned subsidiaries of
the Menarini Group, as well as the solicitation/recommendation statement to be
filed by Stemline, Stemline will also file quarterly and current reports with
the SEC. Stemline's filings with the SEC are available to the public from
commercial document-retrieval services and at the website maintained by the SEC
at http://www.sec.gov.
Forward Looking Statements
The information contained in this Current Report is as of May 4, 2020. Stemline
and the Menarini Group assume no obligation to update forward-looking statements
contained in this Current Report as the result of new information or future
events or developments, except as may be required by law.
This Current Report contains forward-looking information related to the Menarini
Group, Stemline and the proposed acquisition of Stemline that involves
substantial risks and uncertainties that could cause actual results to differ
materially from those expressed or implied by such statements. Forward-looking
statements in this document and the accompanying exhibits include, among other
things, statements about the potential benefits of the proposed acquisition, the
anticipated contingent value right payment, Stemline's plans, objectives,
expectations and intentions, the financial condition, results of operations and
business of Stemline, Stemline's product pipeline and portfolio assets,
Stemline's ability to achieve the milestone that triggers the CVR payment, the
anticipated timing of closing of the proposed acquisition and expected plans for
financing the proposed acquisition. Risks and uncertainties include, among other
things, risks related to the satisfaction or waiver of the conditions to closing
the proposed acquisition (including the failure to obtain necessary regulatory
approvals) in the anticipated timeframe or at all, including uncertainties as to
how many of Stemline's stockholders will tender their shares in the tender offer
and the possibility that the acquisition does not close; the possibility that
competing offers may be made; risks related to obtaining the requisite consents
to the acquisition, including, without limitation, the timing (including
possible delays) and receipt of clearance under the HSR Act; disruption from the
transaction making it more difficult to maintain business and operational
relationships; significant transaction costs; the uncertainties inherent in
research and development, including the ability to meet anticipated clinical
endpoints, commencement and/or completion dates for clinical trials, regulatory
submission dates, regulatory approval dates and/or launch dates, as well as the
possibility of unfavorable new clinical data and further analyses of existing
clinical data and, as such, the uncertainty that the milestone for the CVR
payment may not be achieved in the prescribed timeframe or at all.
A further description of risks and uncertainties relating to Stemline can be
found in Stemline's Annual Report on Form 10-K for the fiscal year ended
December 31, 2019, and in its subsequent Quarterly Reports on Form 10-Q and
Current Reports on Form 8-K, all of which are filed with the SEC and available
at www.sec.gov and https://ir.stemline.com/financial-information.
These forward-looking statements are based on numerous assumptions and
assessments made by the Menarini Group and Stemline in light of their respective
experiences and perceptions of historical trends, current conditions, business
strategies, operating environment, future developments and other factors they
believe are appropriate. By their nature, forward-looking statements involve
known and unknown risks and uncertainties because they relate to events and
depend on circumstances that will occur in the future. Although it is believed
that the expectations reflected in the forward-looking statements in this
Current Report are reasonable, no assurance can be given that such expectations
will prove to have been correct and persons reading this corporate release are
therefore cautioned not to place undue reliance on these forward-looking
statements which speak only as at the date of this corporate release.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
Number Description
Agreement and Plan of Merger, dated May 3, 2020, among Stemline
2.1 Therapeutics, Inc., Berlin-Chemie AG and Mercury Merger Sub, Inc.*
Amendment to Stemline's Amended and Restated Bylaws, dated May 3,
3.1 2020
99.1 Form of Tender and Support Agreement, among Berlin-Chemie AG, Mercury
Merger Sub, Inc. and certain stockholders of Stemline Therapeutics,
Inc.
99.2 Joint Press Release, dated May 4, 2020
Cover Page Interactive Data File (embedded within the Inline XBRL
104 document)
* Schedules to the Agreement and Plan of Merger have been omitted pursuant to
Item 601(b)(2) of Regulation S-K. The registrant will furnish copies of any
such schedules to the U.S. Securities and Exchange Commission upon request.
© Edgar Online, source Glimpses
STEMLINE THERAPEUTICS, INC. 
