Synergy Pharmaceuticals Inc.’s (SGYP) stockholders recently approved Synergy Pharma's merger with Callisto Pharmaceuticals Inc. The deal was initially announced in Jul 2012 and later amended in Oct 2012. The merger is expected to be completed soon.
As per the initial terms of the merger agreement both the companies decided that every outstanding share of common stock of Callisto will be swapped for 0.17 shares of common stock of Synergy Pharma. Moreover, the 22.3 million shares of Synergy Pharma held by Callisto will be canceled.
The initial terms of the merger further stated that the shares of Synergy Pharma will be issued to Callisto under certain lockup commencing from the date of merger. The lockup will end either eighteen months from the date of merger or in case of a change in control (as defined in the merger agreement), whichever is earlier.
It was also decided that Callisto stockholders will receive shares of common stock of Synergy Pharma in a tax-free exchange. Moreover, stockholders of Synergy Pharma will own approximately 61.7% of the combined company and the balance will be owned by the stockholders of Callisto.
However, Synergy Pharma and Callisto revised their merger agreement later in Oct 2012. Both the companies agreed to change the exchange ratio to almost 0.18 from the previous ratio, which means every outstanding share of common stock of Callisto will be exchanged for almost 0.18 shares of common stock of Synergy Pharma.
The previous lockup provision was also revised and the lockup is expected to begin on the day of the merger and will end either twenty-four months from the date of merger or if there is a change in control (as defined in the merger agreement), whichever is earlier.
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