Druck Icon

Eckert & Ziegler withdraws offer to acquire Theragenics

Berlin, April 6, 2011. The Executive Committee of Eckert & Ziegler Strahlen- und Medizintechnik AG (Reuters: EUZ.DE) today determined not to increase, or to continue to pursue, its offer to acquire Theragenics Corporation (NYSE: TGX) due to continued resistance from the Theragenics board of directors against any kind of negotiated transaction, and for lack of evidence that the additional effort of a hostile take-over would be justified by the risk-adjusted business value of the target. Eckert & Ziegler therefore withdraws its offer to acquire Theragenics.

On 17 March 2011, Eckert & Ziegler announced that it had submitted a non-binding proposal to the Board of Directors of Theragenics Corporation to acquire, either directly or through Eckert & Ziegler affiliate IBt Bebig, all the outstanding shares of Theragenics for $2.20 per share, in cash. The offer represented a total equity value of approximately $74 million and a premium of 38.4% over Theragenics' closing stock price on 16 March 2011. The offer also represented a premium of 15.8% over the 52 week high trading price of Theragenics stock.

Regrettably, Eckert & Ziegler received a letter from Theragenics, dated 25 March 2011, in which the Board of Directors of Theragenics reiterated that it had determined that it was not advisable for Theragenics to pursue a sale of the Company "at this time". Eckert & Ziegler's proposal, the letter claimed, "grossly" undervalued the business and prospects of Theragenics. The letter then also discouraged "further discussion", despite the fact that the $2.20 per share price offered had not been reached during the past two and a half years, and that significant value developments have not been reported since.

Under American law, and particular in the case of Theragenics, the Board of Directors occupies a very strong position vis-à-vis a potential acquirer. A hostile take-over bid is therefore much more costly and time consuming than a consensual transaction, and fighting an unreceptive board is only justified if the acquirer sees a substantially increased business value beyond the friendly terms offered. Lacking evidence of the latter, Eckert & Ziegler decided against increasing the offer or continuing its effort to acquire Theragenics at this time. However, Eckert & Ziegler continues to strongly believe that the proposed acquisition would provide superior value to Theragenics' shareholders than the current strategy and would offer better products, better services and innovation to customers.

"We continue to believe that our all cash offer of $2.20 per share provides fair value to the shareholders of Theragenics.  We are very disappointed that the Theragenics Board of Directors refuses to engage in a productive discussion between us, which could have put Eckert & Ziegler in a position to increase the offer. But this refusal to engage in any negotiated process whatsoever currently obliges us to withdraw our offer", said Dr. Andreas Eckert, CEO of Eckert & Ziegler and Chairman of the Board of IBt Bebig.

"We believe the Board and management of Theragenics continues to act in their own interests, rather than the best interests of all of the shareholders of Theragenics. We continue to believe a transaction between Eckert & Ziegler and Theragenics would be mutually beneficial to Theragenics' shareholders, employees and customers, and we reserve the right to in the future to make a new proposal to acquire Theragenics. We believe the combined companies would provide a real opportunity to further promote Permanent Brachytherapy, a minimally invasive one day procedure, as an effective and economical treatment option", said Dr. Edgar Löffler Managing Director of IBt Bebig.