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This announcement is neither an offer to purchase nor a solicitation of an
offer to sell Shares (as defined below). The Offer (as defined below) is made
only by the Offer to Purchase, dated August 21, 2000, of Transmittal and any
amendments or supplements thereto, and is being made to all holders of
Shares. The Offer is not being made to (nor will tenders be accepted from or
on behalf of) holders of Shares in any jurisdiction in which the making of
the Offer or the acceptance thereof would not be in compliance with the
securities, blue sky or other laws of such jurisdiction. However, the
Purchaser (as defined below) may, in its discretion, take such action as it
may deem necessary to make the Offer in any jur on and extend the Offer to
holders of Shares in such jurisdiction.
Notice of Offer to Purchase for Cash
All of the Outstanding Shares of Common Stock
(and the accompanying Rights (as defined below))
of
PathoGenesis Corporation
at
$38.50 Net Per Share
by Picard Acquisition Corp.
a wholly owned subsidiary of
Chiron Corporation
Picard Acquisition Corp., a Delaware corporation (the "Purchaser"), a wholly
owned subsidiary of Chiron Corporation, a Delaware corporation ("Parent"), is
offering to purchase all of the outstanding shares of Common Stock, par value
$0.001 per share (the "Common Stock" and, together with the associated rights to
purchase Series A Junior Preferred Stock (the "Rights"), the "Shares") of
PathoGenesis Corporation, a Delaware corporation (the "Company"), at a price of
$38.50 per Share, net to the seller in cash (less any required withholding
taxes), without interest thereon, on the terms and subject to the conditions set
forth in the Offer to Purchase, dated August 21, 2000 (the "Offer to Purchase"),
and in the related Letter of Transmittal (which, together with any amendments or
supplements thereto, collectively constitute the "Offer"). Tendering
stockholders who have Shares registered in tge fees or commissions or, subject
to Instruction 6 of the Letter of Transmittal, transfer taxes on the purchase of
Shares pursuant to the Offer. Stockholders who hold their
<PAGE>
Shares through a broker, dealer, commercial bank, trust company or other
nominee should consult such institution as to whether it charges any service
fees. Purchaser will pay all charges and expenses of the Dealer Manager, the
Depositary and MacKenzie Partners, Inc., which is acting as the information
agent (the "Information Agent"), incurred in connection with the Offer.
Following the consummation of the Offer, the Purchaser intends to effect the
Merger described below.
The Offer is conditioned upon, among other things, (i) there being validly
tendered and not withdrawn prior to the expiration of the Offer that number of
Shares which, when added together with all other Shares owned by Parent and its
subsidiaries, would represent at least a majority of the outstanding Shares
(determined on a fully diluted basis for all outstanding stock options and other
rights (other than the Rights, if such Rights are not at that time exercisable)
to acquire Shares outstanding on the date of purchase) (the "Minimum
Condition"), (ii) any requisite waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), applicable to
the purchase of Shares pursuant to the Offer or the Merger described herein
having been terminated or having expired (the "HSR Condition"), and (iii) the
applicable waiting periods under foreign antitrust and competition laws having
been terminated or having expired, except for such waiting periods the failure
of which to terminate or expire is not reasonably likely to have a Parent
Material Adverse Effect or a Company Material Adverse Effect (as such terms are
defined in the Offer to Purchase) or to provide a reasonable basis to conclude
that the parties to the Merger Agreement or any of their respective directors,
officers, agents, advisors or other representatives would be subject to the risk
of criminal liability (the "Foreign Antitrust Condition"). The Offer is also
subject to the satisfaction of certain other conditions. The Minimum Condition,
the HSR Condition, the Foreign Antitrust Condition and the other conditions to
the Offer set forth in the Offer to Purchase are collectively referred to as the
"Offer Conditions." See Section 13 of the Offer to Purchase.
The Offer is being made pursuant to the Agreement and Plan of Merger, dated as
of August 13, 2000 (the "Merger Agreement"), among Parent, the Purchaser and the
Company. The purpose of the Offer is for Parent, indirectly through the
Purchaser, to acquire a majority voting interest in the Company as the first
step in a business combination. The Merger Agreement provides that, among other
things, the Purchaser will make the Offer and that simultaneously with or as
soon as practicable after expiration of the Offer, receipt of any required
approval by the Company's stockholders of the Merger Agreement and the
satisfaction or waiver of the other conditions set forth in the Merger
Agreement, the Purchaser will be merged with and into the Company in accordance
with relevant provisions of the General Corporation Law of the State of Delaware
(the "DGCL"), with the Company continuing as the surviving corporation (the
"Merger"). At the effective time of the Merger (the "Effective Time"), each
issued and outstanding Share (other than Shares, if any, that are held by any
stockholder who is entitled to demand and properly demands appraisal of such
Shares pursuant to, and who complies in all respects with, the provisions of
Section 262 of the DGCL and Shares that are owned by the Company (as treasury
stock), Parent or any subsidiary of Parent (including the Purchaser) immediately
prior to the Effective Time) shall be converted into the right to receive in
cash, without interest, $38.50 or any higher price that may be paid for the
Shares pursuant to the Offer.
THE BOARD OF DIRECTORS OF THE COMPANY HAS DETERMINED THAT THE OFFER AND THE
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MERGER ARE ADVISABLE AND IN THE BEST INTERESTS OF THE COMPANY'S STOCKHOLDERS,
AND UNANIMOUSLY RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS ACCEPT THE OFFER AND
TENDER THEIR SHARES PURSUANT TO THE OFFER.
For purposes of the Offer, the Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered and not properly
withdrawn as, if and when the Purchaser gives oral or written notice to the
Depositary of the Purchaser's acceptance for payment of such Shares pursuant to
the Offer. On the terms and subject to the conditions of the Offer, payment for
Shares accepted for payment pursuant to the Offer will be made by deposit of the
purchase price with the Depositary, which will act as agent for tendering
stockholders for the purpose of receiving payment from the Purchaser and
transmitting such payment to tendering stockholders. Under no circumstances will
interest on the purchase price of Shares be paid by the Purchaser because of any
extension of the Offer or delay in making any payment. In all cases, payment for
Shares tendered and accepted for payment pursuant to the Offer will be made only
after timely receipt by the Depositary of (i) certificates for such Shares or
timely confirmation of a book-entry transfer of such Shares into the
Depositary's account at the Book-Entry Transfer Facility (as defined in the
Offer to Purchase), pursuant to the procedures set forth in the Offer to
Purchase, (ii) a properly completed and duly executed Letter of Transmittal (or
manually signed facsimile thereof) with any required signature guarantees or, in
the case of a book-entry transfer, an Agent's Message (as defined in the Offer
to Purchase), and (iii) any other documents required by the Letter of
Transmittal.
If, by the Expiration Date, any or all of the Offer Conditions have not been
satisfied, the Purchaser, in its sole discretion may elect to: (i) extend the
Offer and, subject to applicable withdrawal rights, retain all tendered Shares
until the expiration of the Offer, as extended, subject to the terms of the
Offer; (ii) waive all of the unsatisfied Offer Conditions (other than the
Minimum Condition and the condition that the Merger Agreement not be terminated
in accordance with its terms) and, subject to complying with applicable rules
and regulations of the Securities and Exchange Commission (the "SEC"), accept
for payment all Shares so tendered; or (iii) terminate the Offer and not accept
for payment any Shares and return all tendered Shares to tendering stockholders.
The term "Expiration Date" means 12:00 Midnight, New York City time, on Monday,
September 18, 2000, unless the Purchaser shall have extended the period of time
for which the Offer is open, in which event the term "Expiration Date" shall
mean the latest time and date at which the Offer, as so extended by the
Purchaser shall expire. The Purchaser does not currently intend to make a
subsequent offering period available following the Expiration Date pursuant to
Rule 14d-11 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), although it reserves the right to do so if it obtains the written consent
of the Company.
Subject to the terms of the Merger Agreement and applicable rules and
regulations of the SEC, the Purchaser expressly reserves the right, in its sole
discretion, at any time or from time to time, to extend the Offer by giving oral
or written notice of such extension to the Depositary. During any such extension
of the Offer, all Shares previously tendered and not withdrawn will remain
subject to the Offer, subject to the right of a tendering stockholder to
withdraw such stockholder's Shares. Notwithstanding any other term of the Offer
or the Merger Agreement, the Purchaser shall not be required to accept for
payment or, subject to any applicable rules and regulations of the SEC,
including Rule 14e-1(c) under the Exchange Act (relating to the Purchaser's
obligation to pay for or return tendered Shares promptly after the
<PAGE>
termination or withdrawal of the Offer), to pay for any Shares tendered
pursuant to the Offer, unless the Offer Conditions have been satisfied.
Pursuant to the Merger Agreement, the Purchaser reserves the right to waive
any condition to the Offer or modify the terms of the Offer, except that,
without the written consent of the Company, the Purchaser will not (i) reduce
the number of Shares subject to the Offer, (ii) reduce the price per Share to
be paid pursuant to the Offer, (iii) change or waive the Minimum Condition,
add to the Offer Conditions or modify the Offer Conditions in any manner
adverse to the holders of Shares, (iv) except as described below, extend the
Offer, (v) change the form of consideration payable in the Offer or (vi)
otherwise amend the Offer in any manner adverse to the holders of Shares.
Notwithstanding the foregoing, the Purchaser may (but shall not be obligated
to), without the consent of the Company, (i) extend the Offer for one or more
periods of time (which, without the written consent of the Company, shall not
exceed ten days per extension) that the Purchaser reasonably believes are
necessary to cause the Offer Conditions to be satisfied, if at the scheduled
expiration date of the Offer any of the Offer Conditions are not satisfied,
until such time as such Offer Conditions are satisfied or waived, (ii) extend
the Offer for any period required by any rule, regulation, interpretation or
position of the SEC or the staff thereof applicable to the Offer, or (iii)
extend the Offer on one or more occasions for an aggregate period of not more
than ten business days if the Minimum Condition has been satisfied but fewer
than 90% of the Shares have been validly tendered and not withdrawn. Pursuant
to the Merger Agreement, if all of the Offer Conditions are not satisfied on
any scheduled Expiration Date, then the Purchaser will from time to time and
on each such occurrence extend the Offer for a period of time (which, without
the written consent of the Company, shall not exceed ten days per extension)
that the Purchaser reasonably believes is necessary to cause the Offer
Conditions to be satisfied until such conditions are satisfied or waived,
provided that, so long as Parent and the Purchaser shall have complied with
their obligations under the Merger Agreement, the Purchaser shall not be
required to extend the Offer beyond March 14, 2001, as such date may be
extended pursuant to the Merger Agreement. Upon the terms and subject to the
conditions of the Offer (including the Offer Conditions and, if the Offer is
extended or amended, the terms and conditions of any such extension or
amendment), the Purchaser will accept for payment, and will pay for, all
Shares validly tendered and not withdrawn promptly after the expiration of
the Offer. If there is a subsequent offering period, all Shares tendered
during the subsequent offering period will be immediately accepted for
payment and paid for as they are tendered. Shares tendered in any subsequent
offering period and accepted for payment may not be withdrawn. The Purchaser
confirms that its reservation of the right to delay payment for Shares which
it has accepted for payment is limited by Rule 14e-1(c) under the Exchange
Act, which requires that a tender offeror pay the consideration offered or
return the tendered securities promptly after the termination or withdrawal
of a tender offer.
Any decision to provide a subsequent offering period will be announced at least
five business days prior to the expiration of the Offer and the Purchaser will
announce the approximate number and percentage of Shares deposited as of the
expiration of the Offer no later than 9:00 a.m., New York City time, on the next
business day following the expiration of the Offer, and such securities will be
immediately accepted and promptly paid for.
Tenders of the Shares made pursuant to the Offer are irrevocable except that
Shares tendered pursuant to the Offer may be withdrawn at any time prior to
<PAGE>
the expiration of the Offer and, unless theretofore accepted for payment by
the Purchaser pursuant to the Offer, may also be withdrawn at any time after
October 20, 2000. There will be no withdrawal rights during any subsequent
offering period for any Shares tendered during the subsequent offering
Period. For a withdrawal of Shares tendered pursuant to the Offer to be
effective, a written, telegraphic or facsimile transmission notice of
withdrawal must be timely received by the Depositary at one of its addresses
set forth on the back cover of the Offer to Purchase. Any notice of
withdrawal must specify the name of the person who tendered the Shares to be
withdrawn, the number of Shares to be withdrawn and the name in which the
certificates representing such Shares are registered if different from that
of the person who tendered the Shares. If certificates for Shares to be
withdrawn have been delivered or otherwise identified to the Depositary, the
name of the registered holder and the serial numbers of the particular
certificates evidencing the Shares to be withdrawn must also be furnished to
the Depositary as aforesaid prior to the physical release of such
certificates. All questions as to the form and validity (including time of
receipt) of any notice of withdrawal will be determined by the Purchaser, in
its sole discretion, which determination shall be final and binding. None of
the Purchaser, Parent, the Dealer Manager, the Depositary, the Information
Agent, or any other person will be under any duty to give notification of any
defects or irregularities in any notice of withdrawal or incur any liability
for failure to give such notification. Withdrawals of tender for Shares may
not be rescinded, and any Shares properly withdrawn will be deemed not to
have been validly tendered for purposes of the Offer. However, withdrawn
Shares may be retendered by following one of the procedures described in the
Offer to Purchase at any time prior to the Expiration Date or the expiration
of any subsequent offering period. Sales of Shares pursuant to the Offer and
the exchange of Shares for cash pursuant to the Merger will be taxable
transactions for Federal income tax purposes and may also be taxable under
applicable state, local and other tax laws. For Federal income tax purposes,
a stockholder whose Shares are purchased pursuant to the Offer or who
receives cash as a result of the Merger will realize gain or loss equal to
the difference between the adjusted basis of the Shares sold or exchanged and
the amount of cash received therefor. Such gain or loss will be capital gain
or loss if the Shares are held as capital assets by the stockholder. Capital
gain of a non-corporate stockholder is generally subject to a maximum tax
rate of 20% in respect of property held for more than one year. The income
tax discussion set forth above is included for general information only and
may not be applicable to stockholders in special situations such as
stockholders who received their shares upon the exercise of stock options or
otherwise as compensation and stockholders who are not United States persons.
Stockholders should consult their own tax advisors with respect to the
specific tax consequences to them of the Offer and the Merger, including the
application and effect of Federal, state, local, foreign or other tax laws.
The information required to be disclosed by Paragraph (d)(1) of Rule 14d-6 of
the General Rules and Regulations under the Exchange Act is contained in the
Offer to Purchase and is incorporated herein by reference.
The Company has provided to the Purchaser its list of stockholders and
security position listing for the purpose of disseminating the Offer to
holders of Shares. The Offer to Purchase, the related Letter of Transmittal
and other related materials will be mailed to record holders of Shares and
will be mailed to brokers, dealers, commercial banks, trust companies and
similar persons whose names, or the names of whose nominees, appear on the
<PAGE>
stockholder list or, if applicable, who are listed as participants in a
clearing agency's security position listing, for subsequent transmittal to
beneficial owners of Shares.
The Offer to Purchase and the related Letter of Transmittal contain important
information that should be read carefully before any decision is made with
respect to the Offer.
Questions and requests for assistance and copies of the Offer to Purchase,
the Letter of Transmittal and all other tender offer materials may be
directed to the Information Agent or the Dealer Manager at their respective
addresses and telephone numbers set forth below, and will be furnished
promptly at the Purchaser's expense. The Purchaser will not pay any fees or
commissions to any broker or dealer or any other person (other than the
Dealer Manager) for soliciting tenders of Shares pursuant to the Offer. The
Information Agent for the Offer is:
MACKENZIE
PARTNERS, INC.
LOGO
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (Call Collect)
E-mail: [email protected]
or
Call Toll-Free (800) 322-2885
The Dealer Manager for the Offer is:
Donaldson, Lufkin & Jenrette LOGO
2121 Avenue of the Stars, Suite 3100
Los Angeles, California 90067
Call Collect: (310) 282-7765
August 21, 2000
