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Biomet Accepts $11.4 Billion Private Equity Takeover Offer

Biomet accepted a sweetened takeover bid of $11.4 billion from a group of private equity firms after a influential shareholder advisory firm urged the orthopedic device maker's shareholders to reject the previous $10.9 billion offer.

The private equity consortium, which includes affiliates of Blackstone Group, Goldman Sachs Capital Partners, Kohlberg Kravis Roberts and TPG, will begin a tender offer on or before June 14 to acquire all of Biomet's outstanding shares.

Completion of the tender offer is subject to the condition that at least 75% of the Biomet common shares have been tendered.

Biomet canceled a June 8 special meeting of shareholders scheduled to vote on the original takeover offer. Last month, Institutional Shareholder Services recommended that Biomet shareholders vote against the original $10.9 billion bid, saying the price was too low.

Last month, Institutional Shareholder Services recommended that Biomet shareholders vote against the original $10.9 billion bid, saying the price was too low.

The fundamentals of the hip and knee reconstruction market had improved and shares of Biomet's peers have rallied, ISS said in a report.

"Although the deal terms appear fair as of the time of the deal's announcement in December, the rally of the peer group" and its main joint reconstruction business "imply that there is little takeover premium in the current $44 offer price," the ISS report said.

Morgan Stanley, which served as financial adviser to Biomet, told Biomet's board that, as of June 6, the revised offer was fair from a financial point, Biomet 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," the buyout group said in a statement.

Banc of America Securities and Goldman Sachs advised the private equity group.