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Biotech / Medical : Biomatrix (BXM) Looking Great -- Ignore unavailable to you. Want to Upgrade?

To: Greg Jung who wrote (560)	3/23/2000 2:36:00 PM
From: Michael D. Christian	Read Replies (1) \| Respond to of 569

SEC filing, 28.38% cash? 71.62% stock? can some more knowledgeable explain this to me and how it calculates to the current valuation of the stock wrt the current value of GZSP, GZTR and $37 cash? re: BIOMATRIX, INC. (Exact name of registrant as specified in its charter) <TABLE> <CAPTION> DELAWARE 001-14221 13-3058261 <S> <C> <C> (State or other jurisdiction of (Commission file number) (IRS employer identification incorporation or organization) number) </TABLE> 65 RAILROAD AVENUE, RIDGEFIELD, NEW JERSEY 07657 (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (201) 945-9550 <PAGE> ITEM 5. OTHER EVENTS. On March 6, 2000, Genzyme Corporation ("Genzyme"), a Massachusetts corporation, Seagull Merger Corporation, a Massachusetts corporation and wholly-owned subsidiary of Genzyme ("Merger Sub"), and Biomatrix, Inc. ("Biomatrix"), a Delaware corporation, entered into an Agreement and Plan of Merger (the "Merger Agreement") pursuant to which the parties will effect a business combination through a merger of Biomatrix with and into Merger Sub (the "Merger"). In connection with the Merger, Genzyme will form a new division named Genzyme Biosurgery (the "GBX Division"), and will create a new series of common stock designated as "Genzyme Biosurgery Common Stock," $0.01 par value per share ("GBX Stock"), which will be issued to the holders of Biomatrix common stock, $.0001 par value per share ("Biomatrix Common Stock"), in the Merger. The currently proposed terms of the GBX Stock are set forth as an exhibit to the Merger Agreement. In connection with the Merger, Genzyme's Tissue Repair Division and Surgical Products Division will become part of the GBX Division and the Genzyme Tissue Repair Common Stock ("GTR Stock") series and Genzyme Surgical Products Common Stock ("GSP Stock") series will be exchanged for GBX Stock (the "Genzyme Reorganization"). The transaction, which will be accounted for using the purchase method of accounting, is expected to close in the second quarter of 2000. Under the terms of the Merger Agreement, each outstanding share of Biomatrix Common Stock will be converted, at the option of the holder, into either (i) $37.00 in cash or (ii) one share of GBX Stock (the "Merger Consideration"). Based on the cash election price and the number of shares of Biomatrix Common Stock outstanding, Biomatrix expects that the cash portion of the transaction will be approximately $245 million. Under the Merger Agreement, 28.38% of the shares of Biomatrix Common Stock outstanding at the effective time of the Merger will be exchanged for cash and the remaining 71.62% of the shares of Biomatrix Common Stock outstanding at the time of the Merger will be converted into shares of GBX Stock at a conversion rate of one share of GBX Stock for each share of Biomatrix Common Stock. However, the number of shares of GBX Stock to be issued in the Merger is subject to an upward adjustment if the value of the GBX Stock to be issued in the Merger on the effective date of the Merger is less than 45% of the total Merger Consideration in order to preserve the status of the Merger as a tax-free reorganization. Under the terms of the Merger Agreement, each outstanding share of GSP Stock will convert into 0.6060 shares of GBX Stock and each share of GTR Stock will convert into 0.3352 shares of GBX Stock. Consummation of the Merger is subject to the adoption of the Agreement and Plan of Merger by the Biomatrix stockholders, the approval of the issuance of GBX Stock in the Merger and the necessary amendments of Genzyme's charter by the Genzyme stockholders, including the approval of the exchange of GSP Stock for GBX Stock by GSP stockholders and the exchange of GTR Stock for GBX Stock by GTR stockholders, the receipt of regulatory approvals and certain other customary closing conditions. Certain officers of Biomatrix holding an aggregate of approximately 34% of the outstanding shares of Biomatrix Common Stock have agreed to vote their shares of Biomatrix Common Stock in favor of the Merger until the earlier to occur of the completion of the Merger or 5 days after the termination of the Merger Agreement. In addition, in connection with the Merger, Biomatrix has granted Genzyme an option to purchase 4.6 million shares of Biomatrix Common Stock under certain circumstances. The preceding description of the Agreement and Plan of Merger, the voting agreement with certain Biomatrix officers and the stock option agreement with Genzyme is qualified in its entirety by reference to the copies of such agreements included as exhibits hereto, which are incorporated by reference herein.