Introductory Note
As previously disclosed in the Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) by Terns Pharmaceuticals, Inc., a Delaware corporation (“Terns”), on March 25, 2026, Terns entered into an Agreement and Plan of Merger (the “Merger Agreement”), dated as of March 24, 2026, with Merck Sharp & Dohme LLC, a New Jersey limited liability company (“Merck”), and Thailand Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Merck (“Purchaser”). Pursuant to the Merger Agreement, on April 7, 2026, Purchaser commenced a tender offer to purchase all of the outstanding shares of common stock, par value $0.0001 per share, of Terns (the “Shares”), at a price of $53.00 per Share (the “Offer Price”), net to the seller in cash, without interest and subject to any applicable withholding of taxes, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated April 7, 2026 (as amended or supplemented from time to time, the “Offer to Purchase”) and the related Letter of Transmittal (as amended or supplemented from time to time, the “Letter of Transmittal” and, together with the Offer to Purchase, the “Offer”). The Offer was described in the Tender Offer Statement on Schedule TO (the “Schedule TO”), originally filed jointly by Merck & Co., Inc. (“Merck Parent”), Merck and Purchaser with the SEC, and the Offer to Purchase and the Letter of Transmittal were filed as Exhibits (a)(1)(i) and (a)(1)(ii) to the Schedule TO and are incorporated therein by reference.
| Item 2.01 |
Completion of Acquisition or Disposition of Assets. |
The information contained in the Introductory Note, Item 3.01, Item 5.01 and Item 5.03 of this Current Report on Form 8-K is incorporated by reference into this Item 2.01.
The Offer and related withdrawal rights expired as scheduled at one minute following 11:59 p.m., Eastern time, on May 4, 2026 (such date and time, the “Expiration Time”), and the Offer was not extended. According to Computershare Trust Company, N.A., the depositary for the Offer, as of the Expiration Time, 100,091,794 Shares had been validly tendered and not validly withdrawn pursuant to the Offer, representing approximately 86.36% of the then issued and outstanding Shares. As a result, as of the Expiration Time, a sufficient number of Shares were validly tendered and not validly withdrawn pursuant to the Offer such that the minimum tender condition to the Offer was satisfied. On May 5, 2026, promptly after the expiration of the Offer, Purchaser accepted all Shares validly tendered and not validly withdrawn pursuant to the Offer (the time of such acceptance, the “Offer Acceptance Time”), and payment of the Offer Price for such Shares will be made promptly in accordance with the terms of the Offer and the Merger Agreement.
Also on May 5, 2026, following the Offer Acceptance Time, Purchaser merged with and into Terns (the “Merger”) pursuant to the Merger Agreement and Section 251(h) of the Delaware General Corporation Law, without a vote of Terns’ stockholders, with Terns continuing as the surviving corporation (the “Surviving Corporation”) in the Merger and a wholly owned subsidiary of Merck.
At the effective time of the Merger (the “Effective Time”), each Share then issued and outstanding (other than Shares (a) held at the commencement of the Offer and immediately prior to the Effective Time by Terns (or held in Terns’ treasury), Merck, Purchaser or any other direct or indirect wholly owned subsidiary of Terns, Merck or Purchaser or (b) irrevocably accepted for purchase pursuant to the Offer) was converted into the right to receive the Offer Price (the “Merger Consideration”), without any interest thereon and subject to any withholding of taxes.
In addition, at the Effective Time, (a) each option to purchase Shares that was outstanding and unexercised immediately prior to the Effective Time, whether or not vested and which had a per share exercise price that was less than the Merger Consideration (each, an “In the Money Option”), was cancelled and converted into the right to receive (without interest) a cash payment equal to (i) the excess of (A) the Merger Consideration over (B) the exercise price payable per Share of such In the Money Option, multiplied by (ii) the total number of Shares subject to such In the Money Option, (b) each option to purchase Shares other than an In the Money Option that was outstanding and unexercised as of immediately prior to the Effective Time, whether or not vested, was cancelled with no consideration payable in respect thereof and (c) each restricted stock unit award covering Shares (each, a “Company RSU”) that was outstanding as of immediately prior to the Effective Time, whether or not vested, was cancelled and converted into the right to receive (without interest) a cash payment equal to the product of (i) the Merger Consideration and (ii) the number of Shares subject to such Company RSU.
