Ivax Corp. and Trinity Capital Enterprise Corp. said Thursdaythat they have signed a letter of intent for the merger of two ofIvax's wholly owned subsidiaries with Trinity through a stockswap worth about $245 million.
Trinity (NASDAQ:TICO) would receive all of the common stockof Diamedix Corp. and GDU Trading Co., would issue to Ivax 20million shares of Trinity common stock. After the merger, Ivaxwould have 87 percent of Trinity shares outstanding.
Ivax (AMEX:IVX) also would receive warrants exercisable at$10 per share to purchase an additional 7 million Trinityshares. The warrants are redeemable by Trinity for 5 cents ifthe market price of Trinity stock equals or exceeds $15 for 20consecutive trading days.
Ivax shares lost 13 cents to $38.13 on Thursday. Trinity rose$2.50 to $12.25.
Diamedix and GDU, through Ivax's Delta Biologicals S.r.l.subsidiary, develop, manufacture and market medicaldiagnostic test kits, reagents and instruments. Trinity is a shellcompany formed in 1991 to seek a merger with a businesswith significant growth potential.
"By separating our diagnostics shares and putting them inTrinity, people can invest in the diagnostics business and wecan expand that business without diluting Ivax shareholders,"said Richard Pfenniger Jr., senior vice president of legal affairsat Ivax. Ivax's main business is pharmaceuticals.
A definitive agreement must be negotiated.
-- Karen Bernstein BioWorld Staff
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