Amarin Corp Plc (AMRN)

[ggwpq]

Background of Astellas/Audentes BO:

Audentes’ Board regularly reviews with Audentes’ management Audentes’ performance and prospects in light of its business and developments in the gene therapy and biopharmaceutical industries. These reviews have included consideration, from time to time, of pursuing potential partnerships, collaborations and other strategic transactions to enhance stockholder value, and have involved from time to time discussions with financial advisors, including Centerview Partners LLC (“Centerview”), with whom Audentes entered into a confidentiality agreement on March 20, 2019. In addition, from time to time Audentes has engaged in discussions with global pharmaceutical companies regarding partnering transactions involving Audentes’ product candidates, but such discussions did not result in a partnering transaction.

On May 22, 2019, Claudia Mitchell, Astellas’ Senior Vice President of Product & Portfolio Strategy, contacted Matthew R. Patterson, Audentes’ Chairman and Chief Executive Officer, to propose a meeting in San Francisco to introduce the Astellas and Audentes teams and to discuss the potential for partnering opportunities, including related to AT132.

On June 19, 2019, members of Audentes’ management, including Natalie Holles, Audentes’ President and Chief Operating Officer, met with representatives of Astellas at Audentes’ headquarters in San Francisco to discuss partnering opportunities for AT132.

On July 8, 2019, Astellas and Audentes executed a confidentiality agreement dated July 4, 2019 to facilitate confidential discussions related to partnering opportunities for AT132.

On September 15, 2019, Dr. Mitchell sent an email to Mr. Patterson to inform him of Astellas’ interest in further discussions and proposed a meeting between Mr. Patterson and representatives of Astellas at the Cell & Gene Meeting on the Mesa industry conference to be held in San Diego, California October 1-4, 2019 (the “Mesa Conference”). Subsequent to this email, a meeting was scheduled for October 2, 2019.

On September 29, 2019, Dr. Mitchell sent an email to Mr. Patterson to inform him that Naoki Okamura, Representative Director, Corporate Executive Vice President, Chief Strategy Officer and Chief Financial Officer of Astellas, would like to have a dinner meeting with him on Thursday, October 3, 2019 in San Diego. Subsequent to this email, a dinner was scheduled for October 3, 2019 between Mr. Patterson and Mr. Okamura.

On October 1, 2019, Mr. Patterson spoke with Dr. Mitchell at a reception at the Mesa Conference, and during their conversation Dr. Mitchell suggested that Astellas was likely to make an unspecified business proposal to Audentes during or after dinner with Mr. Okamura on October 3, 2019. Subsequently on October 1, 2019, Mr. Patterson contacted a representative of Centerview, with whom Audentes’ senior management had previously discussed Audentes’ business and strategy, and informed him of his expectation that Astellas might make a proposal to acquire Audentes.

On October 2, 2019, Mr. Patterson met with Dr. Mitchell and Ulf Tollemar, Astellas’ Vice President, Primary Focus Lead Genetic Regulation, and representatives of Astellas’ business development team in San Diego. During this meeting, Dr. Mitchell and Mr. Tollemar presented Astellas’ planned strategic focus on gene therapy products and its desire to work with Audentes in this strategic area.

On October 3, 2019, Mr. Patterson had a dinner meeting with Mr. Okamura, during which Mr. Okamura described Astellas’ strategic interest in gene therapy and Astellas’ view that an acquisition of Audentes would represent a key step in its entry into this field, and stated that he would be sending Mr. Patterson a written proposal to acquire Audentes after the meeting.

Later that evening on October 3, 2019, Astellas sent to Audentes a letter containing a non-binding proposal to acquire all of the outstanding Shares for $50.00 per Share in cash (the “October 3 Proposal”). The October 3 Proposal indicated that Astellas would fund the transaction with cash on hand and potentially external loan facilities, and that consummation of a transaction would not be contingent on financing. In addition, the



18

Table of Contents
October 3 Proposal indicated that Astellas had retained Morgan Stanley & Co, LLC (“Morgan Stanley”) as its financial advisor and Covington & Burling LLP (“Covington”) as its legal counsel in connection with the proposed transaction, that the members of its Executive Committee were fully supportive of the submission of the October 3 Proposal and that Astellas believed that they could complete due diligence concurrently with negotiation of definitive documentation in approximately four weeks. The $50.00 per Share proposed in the October 3 Proposal represented a 78% premium to Audentes’ closing share price on October 3, 2019 and a 66% premium to Audentes’ volume-weighted average share price over the 30-day period ending October 3, 2019. Following receipt of this letter, Mr. Patterson informed each of the other members of the Board of the October 3 Proposal.

On October 6, 2019, the Board held a telephonic meeting, at which members of senior management and representatives of Fenwick & West LLP (“Fenwick & West”), Audentes’ outside counsel, and representatives of Centerview were present, to discuss the October 3 Proposal. At this meeting, the representatives of Fenwick & West reviewed the Board’s fiduciary duties in considering an acquisition proposal and conducting a strategic process. The representatives of Centerview then discussed with the Board their preliminary perspectives on the October 3 Proposal. The Board instructed management to review and, if needed, update Audentes’ long-term financial projections for review by the Board at a subsequent meeting. The Board then discussed the potential risks and benefits of contacting other parties to determine their potential interest in making an acquisition proposal to Audentes, and discussed, together with the representatives of Centerview, the other pharmaceutical companies that might be so contacted and their potential level of interest in pursuing discussions and ability to finance an acquisition of Audentes. The Board directed the representatives of Centerview to contact three global pharmaceutical companies, referred to as Company A, Company B and Company C, that the Board believed were those that might be interested in, and capable of consummating, a potential acquisition of Audentes, based on their expressed strategic interest in gene therapy, their financial resources and their familiarity with Audentes from prior discussions regarding potential partnering transactions, and instructed representatives of Centerview to inquire if any of Company A, Company B or Company C would be interested in making a proposal for a potential acquisition of Audentes. The representatives of Centerview then left the meeting, and the Board discussed the engagement of Centerview to act as Audentes’ financial advisor and the fees that would be payable to Centerview in connection with such an engagement and the Board authorized retaining Centerview subject to agreement on the fees that are acceptable to the Board. The Board’s decision to engage Centerview was based on Centerview’s experience and expertise as a financial advisor in sale transactions in the life sciences industry, and its familiarity with Audentes.

On October 7, 2019, as directed by the Board, representatives of Centerview contacted representatives of Company A to determine whether Company A would be interested in making a proposal to acquire Audentes.

On October 8, 2019, representatives of Morgan Stanley and Centerview held a conference call to discuss the internal decision-making process at Astellas, as well as Astellas’ expertise in, and strategic focus on, gene therapy.

On October 9, 2019, the Board held a telephonic meeting, at which members of senior management and representatives of Fenwick & West and Centerview were present. Thomas Soloway, Audentes’ Senior Vice President and Chief Financial Officer, reviewed Audentes’ preliminary long-term financial projections, including underlying assumptions such as probability of success, and the Board discussed these projections and directed management to continue to review such projections for presentation at a future meeting of the Board. Mr. Patterson and the representatives of Centerview then reviewed the discussions to date with Astellas and Morgan Stanley and the status of outreach to Company A, Company B and Company C. Representatives of Centerview then reviewed with the Board financial aspects of the October 3 Proposal and of Audentes on a standalone basis, based on the preliminary long-term financial projections that were presented at the meeting (a copy of which had previously been provided to Centerview). The Board instructed Mr. Patterson and the representatives of Centerview to inform Astellas that Audentes had not anticipated pursuing a sale transaction at this time and was focused on execution of its independent business plan, and that the price proposed by Astellas was insufficient, but that Audentes would be willing to provide a management presentation (subject to Astellas



19

Table of Contents
executing a non-disclosure agreement containing a customary standstill provision) to help inform Astellas in its consideration of an increase to its proposed acquisition price. The representatives of Centerview then left the meeting, and the Board formally approved the retention of Centerview to act as Audentes’ financial advisor on the terms that had been negotiated.

On October 10, 2019, as directed by the Board, representatives of Centerview contacted representatives of Company B, to determine whether Company B would be interested in making a proposal to acquire Audentes.

On October 13, 2019, as directed by the Board, Mr. Patterson spoke with Mr. Okamura and informed him that Audentes had not anticipated pursuing a sale transaction at this time and was focused on execution of its independent business plan, and that the $50.00 per share price contained in the October 3 Proposal significantly undervalued Audentes in view of Audentes’ product pipeline, its gene therapy platform, its manufacturing expertise and commercial capabilities and its team. Mr. Patterson suggested that the parties enter into a non-disclosure agreement so that Audentes could provide Astellas with information regarding Audentes, in support of Astellas’ consideration of an increase to its proposed price per Share.

On October 14, 2019, Audentes and Centerview executed the engagement letter under which Audentes engaged Centerview to act as Audentes’ financial advisor with respect to a proposed sale transaction.

Also on October 14, 2019, representatives of Company B informed representatives of Centerview that Company B was not interested in pursuing an acquisition of Audentes.

On October 15, 2019, as directed by the Board, representatives of Centerview contacted representatives of Company C to determine whether Company C would be interested in making a proposal to acquire Audentes.

Also on October 15, 2019, representatives of Centerview spoke with representatives of Morgan Stanley and reiterated the message conveyed by Mr. Patterson to Mr. Okamura on October 13, 2019.

Also on October 15, 2019, Audentes executed a confidentiality agreement with Astellas. This confidentiality agreement included a customary 12-month standstill provision that would terminate on customary terms, including upon Audentes’ entry into a definitive agreement with a third party providing for a sale of Audentes, and that did not prohibit Astellas from requesting a waiver of the standstill.

On October 16, 2019, representatives of Company A informed representatives of Centerview that Company A was not interested in pursuing an acquisition of Audentes.

On October 16, 2019, Ms. Holles and other members of Audentes’ senior management met with representatives of Astellas by video conference and provided a presentation regarding Audentes, its business and its product candidates.

Later on October 16, 2019, a representative of Company C informed representatives of Centerview that it was interested in meeting with Audentes’ senior management to receive a presentation on Audentes, its business and its product candidates.

On October 17, 2019, Audentes executed a confidentiality agreement with Company C that, like the confidentiality agreement with Astellas, included a customary standstill provision that would terminate on customary terms, including upon Audentes’ entry into a definitive agreement with a third party providing for a sale of Audentes, and that did not prohibit Astellas from requesting a waiver of the standstill.

On October 18, 2019, Ms. Holles and other members of Audentes’ senior management met with representatives of Company C by video conference and provided a presentation regarding Audentes, its business and its product candidates.



20

Table of Contents
On October 20, 2019, Mr. Patterson spoke with Mr. Okamura, during which Mr. Okamura stated that Astellas would be sending a revised written proposal shortly and expressed his hope that it would enable Astellas to commence detailed due diligence. Shortly after the telephone conversation, Astellas sent to Audentes a letter, dated October 21, 2019, containing a revised non-binding proposal to acquire all of the outstanding Shares for $55.00 per Share in cash (the “October 21 Proposal”). The $55.00 per Share proposed in the October 21 Proposal represented a 105% premium to Audentes’ closing share price on October 18, 2019 and a 91% premium to Audentes’ volume-weighted average share price over the 30-day period ending October 18, 2019. Following receipt of the letter, Mr. Patterson informed each of the other members of the Board of the October 21 Proposal.

On October 21, 2019, the Board held a telephonic meeting, at which members of senior management and representatives of Fenwick & West and Centerview were present. Representatives of Centerview described the October 21 Proposal, and the discussions that had occurred with representatives of Astellas and Company C. Mr. Soloway then reviewed Audentes’ long-term financial projections (the “October 21 Forecast”), which management continued to refine through December 1, 2019. For a detailed discussion of the October 21 Forecast please see the heading titled “—Certain Unaudited Prospective Financial Information of Audentes.” The Board discussed this forecast and authorized its use by Centerview in its financial analyses. Representatives of Centerview then reviewed with the Board preliminary financial analyses of the October 20 Proposal based on this forecast (a copy of which had been provided to Centerview prior to the meeting). The Board then discussed Audentes’ potential responses to the October 21 Proposal, including strategies to maximize the price that might be obtained from Astellas, and determined that the optimal means to achieve this goal would be to propose a specific price that would be acceptable to the Board rather than requesting that Astellas submit a proposal with an increased price without such guidance. Accordingly, the Board instructed Mr. Patterson and the representatives of Centerview to inform Astellas that its proposal was not sufficient and to request that Astellas increase its proposed price per Share to $60.00 per Share. A representative of Fenwick & West then discussed with the Board proposed terms of a draft merger agreement to be sent to Astellas and Company C at the appropriate time.

On October 21, 2019, as directed by the Board, Mr. Patterson spoke with Mr. Okamura and informed him that while the Board was open to consideration of a transaction, the October 21 Proposal was not sufficient. Mr. Patterson stated that the Board had authorized him to request that Astellas increase its proposed price per Share to $60.00 per Share, and that if Astellas could agree on the proposed price the Board would be willing to authorize proceeding quickly to confirmatory due diligence.

On October 22, 2019, at the direction of the Board, representatives of Centerview spoke with representatives of Morgan Stanley and reiterated the message conveyed by Mr. Patterson to Mr. Okamura on October 21, 2019.

On October 25, 2019, Company C sent to Audentes a letter containing a non-binding proposal to acquire all of the outstanding Shares for $49.00 per Share in cash. This proposal stated that it was not subject to any contingency related to financing. Following receipt of the letter, Mr. Patterson informed each of the other members of the Board of this proposal.

Later on October 25, 2019, a representative of Centerview spoke with a representative of Company C and, consistent with prior discussions with Audentes’ management, stated that Company C would need to increase its proposed price per Share in order to be provided with access to due diligence information. Mr. Patterson subsequently reiterated this message in a conversation with a representative of Company C later that same day.

On October 28, 2019, Company C sent to Audentes a letter containing a revised non-binding proposal to acquire all of the outstanding Shares for $52.00 per Share in cash (the “October 28 Company C Proposal”). Following receipt of the letter, Mr. Patterson informed each of the other members of the Board of the October 28 Company C Proposal, and, at the direction of Audentes’ senior management, a representative of Centerview informed Company C that it would be allowed to commence a due diligence review of Audentes.

Also on October 28, 2019, a representative of Centerview contacted representatives of Morgan Stanley requesting confirmation that Astellas remained interested in acquiring Audentes. Later that day, Mr. Okamura



21

Table of Contents
emailed Mr. Patterson to convey that Astellas remained enthusiastic about the opportunity to acquire Audentes, and they planned to talk again later in the week.

On October 29, 2019, in order to maintain a competitive dynamic and provide a basis for Company C to increase its proposed valuation of Audentes, Company C and its advisors were provided with access to an online data room containing due diligence materials with respect to Audentes, and from October 29, 2019 through November 24, 2019, Company C and its advisors conducted a due diligence review of Audentes, including discussions with members of Audentes’ management and review of the materials provided in the online data room. On October 30, 2019, Audentes sent Company C a proposed form of merger agreement.

On October 31, 2019, Mr. Patterson spoke with Mr. Okamura of Astellas and Mr. Okamura informed Mr. Patterson that Astellas would increase its proposed per Share price to $60.00 per Share, indicated that this price had the full support of Astellas’ Chief Executive Officer and its Chairman of the Board and stated that Astellas would expect Audentes to enter into an exclusivity agreement pursuant to which Audentes would agree not to engage in acquisition discussions with any other party. Mr. Patterson responded that Audentes would not be able to enter into such an exclusivity agreement but would proceed with full due diligence and merger agreement negotiation. Subsequently on October 31, 2019, Astellas sent to Audentes a letter, dated November 1, 2019, containing a revised non-binding proposal to acquire all of the outstanding Shares for $60.00 per Share in cash (the “November 1 Proposal”). In this letter, Astellas stated that it assumed that Audentes would agree to negotiate exclusively with Astellas for a period of 30 days, with a one-time automatic extension of another 10 days, and the letter was accompanied by a proposed form of exclusivity agreement. In addition, this letter proposed a targeted signing and announcement of a transaction in early December, and reiterated that the November 1 Proposal had the support of Astellas’ Chief Executive Officer, its Chairman of the Board and the members of its Executive Committee. The $60.00 per Share proposed in the November 1 Proposal represented a 120% premium to Audentes’ closing share price on October 30, 2019 and a 119% premium to Audentes’ volume weighted average share price over the 30-day period ending October 30, 2019. Following receipt of this letter, Mr. Patterson informed each of the other members of the Board of the November 1 Proposal.

On November 1, 2019, Mr. Patterson sent an email to representatives of Astellas acknowledging the November 1 Proposal and reiterating that Audentes was not in a position to agree to the exclusivity request but was willing to proceed with detailed due diligence. In addition, on the same day, representatives of Centerview spoke with representatives of Morgan Stanley and discussed the November 1 Proposal and the proposed timing for execution of a merger agreement.

Later on November 1, 2019, the Board held a telephonic meeting, at which members of senior management and representatives of Fenwick & West and Centerview were present. Representatives of Centerview described the November 1 Proposal and the October 28 Company C Proposal, and the discussions that had occurred with Astellas and Company C, including Astellas’ request for exclusivity. The Board then discussed Audentes’ potential responses to the November 1 Proposal and the October 28 Company C Proposal and Audentes’ plan to provide Astellas with access to the online data room, and determined that, consistent with the communications from Mr. Patterson to Astellas, Audentes should not enter into an exclusivity agreement with Astellas, but rather should maintain the ability to continue discussions with Company C to determine whether they might offer a higher valuation and to maintain a competitive process and allow Astellas to confirm its November 1 Proposal following completion of its due diligence.

On the same day, representatives of Astellas and its advisors were provided with access to the online data room, and from November 1, 2019 through December 1, 2019, Astellas and its advisors conducted a due diligence review of Audentes, including discussions with members of Audentes’ management and review of the materials provided in the online data room.

On November 2, 2019, Audentes sent Astellas a proposed form of merger agreement and on November 6, 2019, Audentes sent Astellas draft disclosure schedules.



22

Table of Contents
During the weeks of November 4, November 11 and November 18, 2019, representatives of Audentes and Fenwick & West participated in a series of due diligence calls with Astellas and Covington, as well as with Company C and its counsel.

On November 8, 2019, Astellas sent representatives of Centerview and Fenwick & West its own proposed form of merger agreement, which provided for, among other terms, (a) a termination fee equal to 3.75% of the equity value of the transaction, payable upon termination of the merger agreement under certain circumstances, including a material breach of Audentes’ non-solicitation obligations under the merger agreement and (b) no industry-specific exceptions in the definition of a “Company Material Adverse Effect.” This draft merger agreement also required that certain unidentified employees of Audentes enter into retention agreements in connection with the proposed transaction.

From November 11, 2019 through November 15, 2019, Ms. Holles and other representatives of Audentes held due diligence meetings with representatives of each of Astellas and Company C separately, at which they discussed Audentes’ business and product candidates, and during which representatives of each of Astellas and Company C separately visited Audentes’ manufacturing facilities.

On November 11, 2019, Company C’s legal counsel delivered a revised draft merger agreement to Fenwick & West.

On November 12, 2019, Fenwick & West sent Astellas and Covington a revised draft of the merger agreement that Astellas had provided on November 8, 2019. This revised draft, among other terms, (a) provided for a termination fee equal to 2.5% of the equity value of the transaction, payable under more limited circumstances than had been included in the November 8 draft, (b) included numerous industry-specific exceptions to the definition of “Company Material Adverse Effect” and (c) removed certain closing conditions that had been included in the November 8 draft.

On November 15, 2019, Covington sent Fenwick & West a revised draft merger agreement that provided a termination fee equal to 3.75% of the equity value of the transaction, payable upon termination of the merger agreement under certain circumstances, including a material breach of Audentes’ non-solicitation obligations under the merger agreement, and Fenwick & West sent Astellas revised disclosure schedules. From November 16, 2019 through December 1, 2019, representatives of Covington and Fenwick & West negotiated the terms of the merger agreement, including the definition of “Company Material Adverse Effect,” the conditions to closing the proposed transaction, provisions regarding regulatory approvals, the size of the termination fee, the circumstances under which it would be payable and, whether, in the event that the termination fee is paid, it would be Astellas’ sole remedy against Audentes.

Also on November 15, 2019, representatives of Centerview spoke with a representative of Company C in which the representatives of Centerview indicated that Company C would need to further increase its price from the $52.00 per Share proposed in the October 28 Company C Proposal if it wished to continue to participate in Audentes’ strategic process, and Company C indicated that it would review its proposed price per Share.

Also on November 15, 2019, Fenwick & West sent Company C’s legal counsel a revised merger agreement. From November 16, 2019 through November 23, 2019, Fenwick & West and counsel to Company C negotiated the terms of this merger agreement.

During the week of November 18, 2019, members of Audentes’ management met with members of Company C’s management to further discuss Audentes’ business and product candidates, and during the week of November 18, 2019, members of Audentes’ management met with members of Astellas’ management and representatives of Astellas’ advisors to further discuss Audentes’ business and product candidates.

On November 19, 2019, representatives of Centerview spoke with representatives of Morgan Stanley to discuss the status of the due diligence process. During this discussion, the representatives of Centerview informed the representatives of Morgan Stanley that another party may be interested in acquiring Audentes.

On November 21, 2019, representatives of Centerview spoke with representatives of Morgan Stanley to discuss the status of due diligence and merger agreement negotiations, and stated that the process was competitive.



23

Table of Contents
On November 22, 2019, Company C sent to Audentes a letter containing a revised non-binding proposal to acquire all of the outstanding Shares for $55.00 per Share in cash (the “November 22 Company C Proposal”).

Also on November 22, 2019, the Board held a telephonic meeting, at which members of senior management and representatives of Centerview and Fenwick & West were present. At the meeting, representatives of Centerview described the status of discussions with Astellas and Company C, and described the November 22 Company C Proposal. Representatives of Fenwick & West then reviewed the material changes to the draft merger agreements proposed by each of Astellas and Company C, including, among other things, (1) proposed changes to the definition of “Company Material Adverse Effect”, (2) the provisions regarding regulatory approvals, and (3) the size of the termination fee payable under certain circumstances, and the circumstances under which such a termination fee would be payable. The Board also discussed the status of, and next steps to be taken in, Audentes’ strategic process and directed Centerview to indicate to Company C that it would need to increase its proposed price per Share by more than the $3.00 per share by which it had increased its proposed price in the November 22 Company C Proposal.

On November 22, 2019, Mr. Patterson spoke with Mr. Okamura and indicated that the process was competitive. During this conversation, Mr. Okamura stated that Astellas would require that officers and certain other employees of Audentes enter into retention agreements with Audentes concurrently with the execution of the merger agreement.

Also on November 22, 2019, at the direction of the Board, a representative of Centerview informed a representative of Company C that it would need to increase its per Share price by more than the $3.00 per share by which it had increased its proposed price in the November 22 Company C Proposal.

On November 23, 2019, the Board held a telephonic meeting, at which members of senior management and representatives of Centerview and Fenwick & West were present. At this meeting, Mr. Patterson and Ms. Holles, as well as the representatives of Centerview and Fenwick & West, described the most recent discussions with Astellas and Company C, the status of the merger agreement negotiations and Astellas’ requirement that officers and certain other employees of Audentes enter into retention agreements concurrently with the execution of the merger agreement. Representatives of Centerview reviewed with the Board potential next steps to complete discussions with Astellas and to determine whether Company C would offer a price per Share that would be acceptable to the Board. After discussion of these matters, the Board directed Centerview to again contact Company C to determine if it would be willing to increase its proposed price per Share to above $60.00 in order to continue its discussions with Audentes.

From November 23, 2019 to November 28, 2019, representatives of Astellas held discussions with certain officers of Audentes regarding the potential terms of the retention agreements.

On November 25, 2019, as directed by the Board, representatives of Centerview again spoke with a representative of Company C and reiterated that in order to continue discussions with Audentes, Company C would need to increase its proposed price per Share to an amount in excess of $60.00.

On November 25, 2019, Company C informed Mr. Patterson that it would not be able to increase its proposed price per Share to $60.00 or above, and accordingly was withdrawing from the process.

During the week of November 25, 2019, Astellas completed its due diligence review of Audentes, including discussions with members of Audentes’ senior management and review of materials provided in the online data room.

On November 26, 2019, Dr. Kazuhiro Ikegai, Associate Director of Business Development for Astellas, informed Ms. Holles that Astellas’ Executive Committee had unanimously approved the execution of the merger agreement.



24

Table of Contents
On November 26, 2019, the Board held a telephonic meeting, at which members of senior management and representatives of Centerview and Fenwick & West were present. At this meeting, Mr. Patterson and representatives of Centerview described the most recent discussions with Astellas and Company C, and a representative of Fenwick & West reviewed the material terms of the draft merger agreement, including those that were still the subject of negotiations between the parties. The Board then discussed Astellas’ requirement that officers and other employees of Audentes enter into retention agreements concurrently with the execution of the merger agreement. In light of the $60.00 per Share price in the November 1 Proposal and the advanced state of merger agreement negotiations with Astellas, the Board authorized Audentes’ management to commence discussions with Astellas regarding the terms of the retention agreements required by Astellas. Following this meeting, a representative of Fenwick & West informed a representative of Covington that if Astellas wished to provide Audentes’ management with the proposed forms of retention agreements to be executed concurrently with the merger agreement, it would now be permitted to do so.

On November 27, 2019, Mr. Okamura informed Mr. Patterson that Astellas’ Board of Directors had unanimously approved the execution of the merger agreement.

On November 28, 2019, Covington sent Fenwick & West the forms of retention agreements that it would require be executed by officers and certain other employees concurrently with the execution of the merger agreement. Members of Audentes’ management reviewed these agreements with separate counsel and negotiated the terms of these agreements with Astellas from November 28, 2019 through December 1, 2019. See “Item 3. Past Contacts, Transactions, Negotiations and Agreements—Arrangements with Current Executive Officers and Directors of Audentes” for a description of the Executive Retention Agreements.

On November 30, 2019, Audentes and Astellas completed their negotiation of the Merger Agreement, agreeing on a termination fee equal to 3.5% of the equity value of the transaction, and providing that in order to permit termination of the Merger Agreement with Audentes being required to pay a termination fee, a breach by Audentes of its non-solicitation obligations must be a “Willful Breach” as defined in the Merger Agreement, and that, in the event the termination fee is paid to Astellas, the termination fee would be Astellas’ sole remedy against Audentes.

On December 1, 2019, the Board held a telephonic meeting, at which members of senior management and representatives of Fenwick & West and Centerview were present. Representatives of Fenwick & West reviewed with the Board the terms of the Merger Agreement and the retention agreements. The Board reviewed changes to the October 21 Forecast reflecting adjustments to certain assumptions, and then reviewed the updated long-term financial projections provided by management that reflect such changes (the “December 1 Forecast”) and approved the December 1 Forecast for Centerview’s use in its financial analyses for rendering its opinion. For a detailed discussion of the December 1 Forecast, please see the heading titled “—Certain Unaudited Prospective Financial Information of Audentes.” Representatives of Centerview then reviewed with the Board Centerview’s financial analyses of the Offer Price, based on the December 1 Forecast. The representatives of Centerview then rendered to the Board an oral opinion, which was subsequently confirmed by delivery of a written opinion dated December 1, 2019, that, as of such date and based upon and subject to the various assumptions made, procedures followed, matters considered, and qualifications and limitations upon the review undertaken in preparing its opinion, the Offer Price to be paid to the holders of Shares (other than as specified in such opinion) pursuant to the Merger Agreement, as provided to Centerview on December 1, 2019, was fair, from a financial point of view, to such holders. For a detailed discussion of Centerview’s opinion, please see the heading titled “—Opinion of Centerview Partners LLC”. The written opinion delivered by Centerview is attached to this Schedule 14D-9 as Annex A. Following additional discussion and consideration of the Merger Agreement and the Offer, the Merger and the other transactions contemplated by the Merger Agreement (including the factors described in “—Reasons for the Recommendation of the Board”), the Board unanimously (1) determined that the Offer, the Merger, the Merger Agreement and the Transactions are advisable and in the best interests of the stockholders of the Company, (2) approved and declared advisable the Merger Agreement and the Transactions and (3) resolved, subject to the terms and conditions of the Merger Agreement, to recommend acceptance of the Offer by the



25

Table of Contents
stockholders of the Company. The Compensation Committee of the Board then met and discussed and approved the retention agreements, established certain cash bonus plans contemplated by the Merger Agreement to be used for employee retention, and adopted resolutions in accordance with Rule 14d-10(d) under the Exchange Act.

Following the Board meeting, representatives of Fenwick & West and Covington completed the disclosure schedules to the Merger Agreement, finalizing these schedules late in the evening of December 1, 2019.

On December 2, 2019, Audentes, Astellas and Purchaser executed the Merger Agreement, and Audentes and Astellas issued a joint press release announcing the execution of the Merger Agreement and the forthcoming commencement of a tender offer by Purchaser to acquire all of the outstanding Shares at the Offer Price.

https://www.sec.gov/Archives/edgar/data/1628738/000119312519314312/d837991dsc14d9.htm#toc837991_4