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Asensus Surgical (NYSE:ASXC) jumped in premarket trading on Wednesday as the medical device company signed a non-binding letter of intent with Germany-based KARL STORZ SE & Co.
Under the agreement, KARL STORZ proposed to acquire Asensus for a purchase price of $0.35 per share in cash. The issue price represented a 66.7% premium to the Asensus' closing price on April 2.
The letter of intent provides that during an exclusivity period of up to ten weeks, Asensus would not engage in negotiations for alternative transactions. During the exclusivity period, KARL STORZ will be conducting diligence and the parties will be negotiating a definitive merger agreement.
In conjunction with the letter of intent, Asensus also entered into a fully secured promissory note with KARL STORZ would enable Asensus to receive a loan of up to $20M from KARL STORZ to support its operations through the exclusivity period.
If the proposed transaction goes through, Asensus will cease to be a publicly traded company. Meanwhile, if the negotiations are terminated, the company would have to repay the bridge loan to KARL STORZ within a prescribed period.
- Source: Press Release