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ALZA CORP. EXERCISES PURCHASE OPTION TO ACQUIRE OUTSTANDING SHARES OF BIO-ELECTRO SYSTEMS CLASS A COMMON STOCK

          ALZA CORP. EXERCISES PURCHASE OPTION TO ACQUIRE
   OUTSTANDING SHARES OF BIO-ELECTRO SYSTEMS CLASS A COMMON STOCK
    PALO ALTO, Calif., Nov. 12 /PRNewswire/ -- Bio-Electro Systems Inc. (BES) (AMEX: BIE) today announced that ALZA Corp. (AMEX: AZA) of Palo Alto, has exercised ALZA's purchase option to acquire all outstanding shares of BES Class A common stock.  The exercise price to be paid by ALZA is $23 per BES share, and will be paid in ALZA Class A common stock.  After giving effect to ALZA's two-for-one stock split announced today, each BES share will be exchanged for .5772 shares of ALZA common stock.  Fractional shares will be paid in cash.
    BES shares will be exchanged for ALZA shares at the closing of the purchase option on Feb. 7, 1992.  After that date, trading in BES shares will cease.  The .5772 ALZA common shares to be exchanged for each BES share was determined by dividing $23 by the average closing price on the American Stock Exchange of ALZA common stock over the five trading days preceding the exercise date, as provided in BES's Restated Certificate of Incorporation, and doubling the resulting number of shares to reflect the ALZA stock split.
    The boards of directors of ALZA and BES have also approved a merger agreement, subject to approval by BES stockholders, as an alternative to the purchase option, at exactly the same price and on the same terms.  The acquisition of BES by ALZA in a merger, rather than under the purchase option, may provide clearer tax advantages for BES stockholders.  A special BES stockholders' meeting will be held on Feb. 6, 1992, to vote on the merger.  If the merger is approved by BES stockholders, it will become effective on Feb. 7, 1992, and BES shares will be exchanged in the merger rather than under the purchase option, but for the exact same number of ALZA shares in either case.
    A registration statement will be filed with the Securities and Exchange Commission concerning the merger.  After the registration statement is effective, materials regarding the merger will be forwarded to BES stockholders.
    Bio-Electro Systems Inc. was formed in 1988 through a rights offering to ALZA stockholders.  BES is developing drug delivery systems utilizing electrotransport and bioerodible polymer drug delivery technologies.
    -0-                    11/12/91
    /CONTACT:  Kera Alexander of Bio-Electro Systems, 415-496-8200/
    (BIE AZA) CO:  Bio-Electro Systems; ALZA Corporation ST:  California IN:  MTC SU:  TNM CH -- LA007 -- 3325 11/12/91 09:26 EST
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Copyright 1991 Gale, Cengage Learning. All rights reserved.

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Publication:PR Newswire
Date:Nov 12, 1991
Words:408
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