Filer: Thermo Cardiosystems Inc.
Subject Company: Thermo Cardiosystems Inc.
Subject Company Exchange Act File No.: 001-10114
Registration Statement No.: 333-
Thermo Cardiosystems Confirms Receipt of
Acquisition Proposal from ABIOMED
WOBURN, Mass., January 9, 2001 - Thermo Cardiosystems Inc. (ASE:TCA) today
confirmed that it has received an unsolicited acquisition proposal from ABIOMED,
Inc. (NASDAQ:ABMD). As announced by ABIOMED in a news release issued earlier
today, ABIOMED proposes a merger it values at a price of $11.50 per share,
consisting of $1.50 in cash and $10.00 in ABIOMED common stock. However,
ABIOMED's acquisition proposal contains a provision that would limit the
ownership interest of Thermo Cardiosystems stockholders to less than 50 percent
of the combined entity at closing. If the price of ABIOMED's stock declines
during the period prior to closing so that the total number of ABIOMED shares
required to be issued to Thermo Cardiosystems stockholders would exceed the 50
percent limit, it is unclear whether ABIOMED would increase the cash component
of its proposal to maintain the overall value of the transaction.
Reproduced at the end of this news release are portions of correspondence
dated January 4, 2001, and December 12, 2000, from ABIOMED to Thermo
Cardiosystems.
On October 3, 2000, Thermo Cardiosystems and Thoratec Laboratories
Corporation (NASDAQ:THOR) entered into a definitive merger agreement. Under the
terms of the agreement, each issued and outstanding share of Thermo
Cardiosystems would be exchanged for 0.835 shares of newly issued Thoratec
stock. In addition, the agreement precludes Thermo Cardiosystems from soliciting
any acquisition proposals or negotiating or entering discussions with any third
party concerning any potential acquisition of Thermo Cardiosystems, unless an
acquisition proposal is unsolicited and the board of directors determines, after
receiving advice from its financial advisor and after consulting with its
outside legal counsel, that the proposal is superior to the Thoratec merger.
Thermo Cardiosystems also reported that on January 8, 2001, Thoratec
requested that the Thermo Cardiosystems board of directors reaffirm its
recommendation in favor of the Thoratec merger. Under the terms of the Thoratec
merger agreement, if the Thermo Cardiosystems board of directors does not
reaffirm the recommendation within 10 days after the request, Thoratec has the
option to terminate the agreement and receive a $12 million termination fee from
Thermo Cardiosystems.
Thermo Cardiosystems Inc. is a leader in the research, development, and
manufacture of implantable left ventricular-assist systems (LVAS). Its
air-driven and electric HeartMate heart-assist devices are implanted alongside
the natural heart and take over the pumping function of the left ventricle for
patients whose hearts are too damaged or diseased to produce adequate blood
flow. Both devices are approved for commercial sale in the United States,
Europe, and Canada. The company also supplies whole-blood coagulation testing
equipment and related disposables, as well as single-use skin-incision devices.
Thermo Cardiosystems is a public subsidiary of Thermo Electron. More information
is available at http://www.thermocardio.com.
Other Important Information:
The proposed merger and the merger agreement between Thermo Cardiosystems and
Thoratec are described in a joint proxy statement/prospectus that has been filed
with the Securities and Exchange Commission. You should read this document
because it contains important information about the transaction, including the
participants in the transaction. You can obtain the joint proxy
statement/prospectus and other documents (including the merger agreement) that
have been filed with the Securities and Exchange Commission for free when they
are available on the Securities and Exchange Commission's Web site at
http://www.sec.gov. Also, if you write us or call us at the below address
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and phone number, we will send you the joint proxy statement/prospectus for free
when it is available.
You can call us at (781) 622-1111, or write to us at:
Investor Relations Department
Thermo Cardiosystems Inc.
81 Wyman Street, P.O. Box 9046
Waltham, MA 02454-9046
The portions of this news release that relate to future plans, events, or
performance are forward-looking statements. Investors are cautioned that all
such statements involve risks and uncertainties, including risks related to the
proposed transaction between Thermo Cardiosystems and Thoratec and the benefits
thereof, government regulatory approval processes, and market acceptance of new
products. These factors, and others, are discussed more fully under the heading
"Risk Factors" in Thoratec's Registration Statement on Form S-4 [File No.
333-49120] filed with the Securities and Exchange Commission on December 29,
2000, and in both companies' other filings with the Securities and Exchange
Commission. Actual results, events, or performance may differ materially. These
forward-looking statements speak only as of the date hereof. None of Thermo
Cardiosystems, Thoratec, or Thermo Electron undertakes any obligation to
publicly release the results of any revisions to these forward-looking
statements that may be made to reflect events or circumstances after the date
hereof, or to reflect the occurrence of unanticipated events.
Excerpts from December 12, 2000 letter
from ABIOMED, Inc. to
Thermo Electron Corporation and
Thermo Cardiosystems Inc.
c/o J.P. Morgan Securities Inc.:
Ladies and Gentlemen:
We are writing to you to request the permission of Thermo Electron
Corporation ("TEC") for ABIOMED, Inc. ("ABIOMED") to make an improved proposal
for the acquisition of Thermo Cardiosystems Inc. ("Thermo Cardio" or the
"Company") by ABIOMED. ABIOMED would be prepared to make a proposal to acquire
Thermo Cardio under the terms outlined below. We believe that TEC, Thermo Cardio
and their respective Boards of Directors would be willing to consider our
proposal because, since agreeing to combine Thermo Cardio with Thoratec
Laboratories Corp. ("Thoratec"), circumstances have changed, making that
transaction less attractive and making a proposal to combine with ABIOMED more
favorable. These changed circumstances include a substantial decline
(approximately 54%) in the market price of Thoratec's stock, reducing the value
to Thermo Cardio's shareholders; issues raised by federal antitrust authorities,
causing you to resubmit your filing for approval; and dissatisfaction with the
Thoratec transaction among many of Thermo Cardio's key customers. Please be
advised that the contents of this letter are proprietary and confidential to
ABIOMED and may not be disclosed to any person other than you and your
representatives without our written consent. When a proposal to acquire Thermo
Cardio is made by ABIOMED, we understand that you may be required to disclose
the contents of such a proposal to Thoratec.
1. Acquisition. ABIOMED would acquire all of the common stock of the
Company pursuant to a merger for consideration of $10.50 per share.
This consideration would consist of $9.00 per share in ABIOMED common
stock and $1.50 per share in cash. So that you are not subject to the
market risk that you have experienced with Thoratec's stock price, we
would be prepared to structure this consideration as a fixed $10.50
price per share as opposed to a fixed exchange ratio, the value of
which fluctuates prior to closing with the value of ABIOMED's stock. To
ensure that our
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1. proposal qualifies as a TCA Superior Offer under paragraph 5.4(e) of
your agreement with Thoratec, our proposal would include a cap
structure that would limit Thermo Cardio's shareholders to less than
50% of the combined equity interests at closing.
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3. Due Diligence. We completed all necessary due diligence during our
prior investigation of Thermo Cardio. We will cooperate with you so
that you can quickly complete any due diligence you feel you may need
to conduct regarding ABIOMED.
4. Financing. In March 2000, ABIOMED completed a public equity offering
that raised proceeds of approximately $100 million and, as a result,
has sufficient funds to finance the cash portion of its proposal and
sufficient working capital for the successful operation of the
combined company.
5. Conditions. We have enclosed a mark up of your contract with Thoratec,
indicating the minor changes required to convert it to a merger
agreement with ABIOMED, and we would be prepared to execute that
agreement immediately, or to meet with you immediately to discuss any
other changes you require. We have the support of our Board of
Directors to make this proposal, and a merger between ABIOMED and
Thermo Cardio would only be subject to the formal approval of our
Board prior to executing the merger agreement, the approval of each
company's shareholders and receipt of required governmental,
regulatory and third-party consents. We are confident that a
combination between ABIOMED and Thermo Cardio would be summarily
approved by the federal antitrust authorities.
Excerpts from January 4, 2001 letter
from ABIOMED, Inc. to
Thermo Electron Corporation and
Thermo Cardiosystems Inc.
c/o J.P. Morgan Securities Inc.:
Ladies and Gentlemen:
We are writing to reiterate our strong interest in ABIOMED acquiring
Thermo Cardio. We remain sensitive to issues of confidentiality in this matter.
However, in light of the disclosures made by you and Thoratec Laboratories in
your amended Form S-4, we hereby offer you $11.50 per share to acquire all of
the common stock of Thermo Cardio. Our $11.50 per share offer consists of $1.50
per share in cash and $10.00 per share in ABIOMED common stock. The terms of our
offer are consistent with those described in our December 12, 2000 letter with
the important exceptions that 1) the offer price is $1.00 per share higher and
2) we are now making an acquisition proposal rather than seeking permission to
make such a proposal.
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