In the fourth quarter of 2025, Novo Nordisk tried a novel structure for making a “superior proposal” as an interloper to top Pfizer’s signed merger agreement to acquire Metsera. The structure provided for Novo, immediately upon signing its proposed merger agreement with Metsera, to acquire half of the equity of Metsera in the form of non-voting preferred stock in exchange for the entire cash portion of the purchase price it would pay for Metsera (which subscription payment for the non-voting preferred would immediately be distributed to the holders of Metsera common stock), and to pay the remainder of the purchase price (in the form of CVRs) for the outstanding common stock of Metsera at closing after receiving regulatory approvals. The thinking was that no HSR approval would be needed to acquire the non-voting preferred because non-voting securities do not typically trigger an HSR filing requirement.
If another interloper were to come along after Novo executed this “superior proposal” agreement with Metsera, then Metsera would have to not only pay Novo a customary termination fee, but also redeem all of the preferred stock for the price paid by Novo for that preferred stock – raising interesting questions about whether all these payments due to Novo in the event the new Novo-Metsera merger agreement was subsequently topped, would lock up the Novo merger agreement so tightly that such subsequent interloper scenarios would be precluded and thereby raise Unocal concerns.
In addition, the structure raised questions about whether the Novo agreement qualified as a “superior proposal” under the existing Pfizer-Metsera merger agreement given the language in that agreement’s definition of “superior proposal” relating to the probability that the interloper’s proposed transaction would ultimately receive the required approvals necessary to close. Still, from the perspective of the Metsera board, even if the Metsera proposal were not a “superior proposal” as defined in the merger agreement, it would be an impressive feat for the Metsera shareholders to immediately receive payment for half the company without any regulatory approval risk and still hold on to their shares and voting power.
Yet, before any review by the Delaware Court of Chancery, the Federal Trade Commission entered the fray by sending a letter to Novo explaining that Novo’s creative structure – in particular the large upfront payment – appeared to implicate the prohibition on employing “transactions and other devices” to obtain control of a company without obtaining HSR approval. Moreover, the letter highlighted that Novo’s proposed restrictions on Metsera’s operations during the potentially 30-month period between signing the merger agreement and the receipt of antitrust approval appeared to raise gun-jumping issues – e.g., the Novo merger agreement restricted Metsera from making capital expenditures in excess of $2.5 million in any year and imposed limitations on Metsera’s ability to retain employees.
As antitrust approval risks continue to risk discounting the value of bids by industry leaders, the pressure to find ways to enhance the value of such bids while complying with state corporate law and antitrust regulatory requirements will continue to grow. The importance to parties of being at the top of their games on both antitrust and corporate fronts and integrating these areas of expertise is now more important than ever.
