Covidien and Medtronic Shareholders Approve Acquisition

Dublin, Ireland-based Covidien plc is preparing for a takeover by Medtronic Inc. In doing so, the company held a court-ordered shareholder meeting as well as an extraordinary general meeting (an annual meeting held earlier than scheduled due to extraordinary circumstances) on Jan. 6 to take votes on six proposals related to the inversion acquisition. The proposals were as follows:

Proposal 1

To approve the scheme of arrangement and authorize the directors of Covidien to take all such actions as they consider necessary or appropriate for carrying the scheme of arrangement into effect. This proposal was passed with more than 99 percent of the vote.

Proposal 2

To approve the cancellation of any Covidien ordinary shares in issue prior to 10 pm, Irish time, on the day before the Irish High Court hearing to sanction the scheme. This proposal was passed with more than 99 percent of the vote.

Proposal 3

To authorize the directors of Covidien to allot and issue new Covidien shares, fully paid up, to new Medtronic (to be named Medtronic plc) and apply reserves in connection with effecting the scheme. This proposal was passed with more than 99 percent of the vote.

Proposal 4

To amend the articles of association of Covidien so that any ordinary shares of Covidien that are issued at or after 10 pm, Irish time, on the last business day before the scheme becomes effective are acquired by new Medtronic for the scheme consideration. This proposal was passed with more than 99 percent of the vote.

Proposal 5

To approve the creation of distributable reserves by reducing all of the share premium of new Medtronic resulting from the issuance of new Medtronic ordinary shares pursuant to the scheme. This proposal was passed with more than 99 percent of the vote.

Proposal 6

To approve, on a non-binding advisory basis, specified compensatory arrangements between Covidien and its named executive officers relating to the transaction. This proposal was less popular, only passing with 95 percent of the vote.

Covidien will be filing a Form 8-K—used to inform shareholders of any information pertinent to their interests—with the U.S. Securities and Exchange Commission setting forth the final results of voting on each of the items listed above.

Medtronic Shareholders Agree

The same day, Medtronic Inc. shareholders voted to approve the medical device giant’s acquisition of Irish company Covidien plc. Based on preliminary vote results, the proposal to adopt the transaction agreement and approve the merger was approved by shareholders owning approximately 95.66 percent of the shares voted at the meeting and approximately 75.18 percent of the outstanding Medtronic shares as of the record date. The final vote results will be filed on a Form 8-K with the U.S. Securities and Exchange Commission on Jan. 9.

The transaction is expected to close in the last week of January or early February, subject to approval by the High Court of Ireland.

“We are extremely pleased with the positive vote we received today by our shareholders,” said Omar Ishrak, chairman and CEO of Medtronic.  “We are convinced that the addition of Covidien’s people and technologies will allow us to expedite our strategic initiatives and will allow us to treat more people, in more ways and in more places around the world.  We look forward to closing this transaction by the end of January or early February.”

The transaction will serve as a tax inversion deal for Medtronic, which hopes to save on taxes by moving its headquarters from Minneapolis, Minn. to Dublin, Ireland. The new company will be named Medtronic plc.