Portable Planet

The Board of Directors of Biomet,  Inc., a worldwide leader in the orthopedic and musculoskeletal  product industry, announced today that it has unanimously recommended to  shareholders an increased offer from a private equity consortium to acquire  Biomet for $46.00 per share in cash, or an equity value of $11.4 billion. Under  the terms of the revised merger agreement, the consortium - which includes  affiliates of the Blackstone Group, Goldman Sachs Capital Partners, Kohlberg  Kravis Roberts & Co. and TPG - will commence a tender offer on or before  June 14, 2007, to acquire all of the outstanding shares of Biomet’s common  stock. Following completion of the tender offer, the consortium will complete a  second-step merger in which any remaining common shares of Biomet will be  converted into the right to receive the same per share price paid in the tender  offer.
 
  The $46.00 per share offer price represents a premium of 32.3%  over the closing price of Biomet’s common stock on April 3, 2006, the trading  day prior to public speculation that the company was exploring strategic  alternatives. Biomet subsequently confirmed on April 6, 2006 that it had  retained Morgan Stanley to assist it in exploring strategic alternatives.
 
  Morgan Stanley has provided the Board of Directors with its  opinion that, as of June 6, 2007 and subject to the qualifications and  assumptions therein, the consideration to be received pursuant to the revised merger  agreement is fair from a financial point of view to holders of Biomet common  stock.
 
  “We believe the proposed price for the transaction is  fair to Biomet’s shareholders. We also believe that the investor group’s tender  offer will deliver superior value to Biomet’s shareholders in a more efficient  and more immediate fashion than the process provided by the original merger  agreement. Moreover, this revised offer provides greater certainty and  visibility to completion of the transaction,” said Niles L. Noblitt,  Chairman of the Board.
 
  In a statement, the sponsor group said: “Our offer  empowers current shareholders who have an economic interest in Biomet common  shares to realize significant value in a timely manner and represents the  absolute limit of our ability to structure an appropriate buyout of Biomet. We  are pleased that the consortium will be in a position to provide the company  with financial and operational resources to support its future growth.”
 
  Completion of the tender offer is subject to the condition  that at least 75% of the Biomet common shares have been tendered in the offer -  the same percentage approval requirement as with the previous merger structure.  The amended merger agreement permits the investor group to revise the condition  regarding minimum acceptance of the tender offer to decrease the minimum  acceptance threshold to a number that, together with shares whose holders have  agreed to vote to approve the second-step merger, represents at least 75% of  the Biomet common shares. The tender offer will expire at midnight, New York  time, on the 20th business day following and including the commencement date,  unless extended in accordance with the terms of the offer and the applicable  rules and regulations of the Securities and Exchange Commission. The tender  offer and subsequent merger are subject to customary conditions for  transactions of this type.
 
  As a result of the revised merger agreement and tender offer,  Biomet announced that it has cancelled the special meeting of shareholders previously  scheduled for Friday, June 8, 2007 to consider and vote on the original merger  agreement announced on December 18, 2006, and related transactions.  Furthermore, as part of the revised merger agreement, Biomet has agreed not to  pay its annual dividend.
 
Morgan Stanley & Co. Incorporated is acting as financial  advisor to the Board of Biomet, Inc. and to Biomet, Inc. Kirkland & Ellis  LLP is legal counsel to Biomet, Inc. and Simpson Thacher & Bartlett LLP is  legal counsel to the independent directors of the Board of Biomet, Inc. Banc of  America Securities LLC is acting as lead M&A advisor and Goldman, Sachs  & Co. is acting as M&A advisor to the private equity consortium. Cleary  Gottlieb Steen & Hamilton LLP is acting as legal advisor to the private equity  consortium.

Source: Biomet