Apollo Global Management, Inc. (NYSE:APO) entered into a definitive merger agreement to acquire The Michaels Companies, Inc. (NasdaqGS:MIK) (the “Company”) for $3.2 billion on March 2, 2021. Apollo have agreed to acquire the Company in a transaction that values Michaels at an equity value of approximately $3.3 billion (for a transaction valued at $5 billion). Under the terms of the agreement, Apollo will commence a tender offer to acquire all outstanding shares of Michaels for $22 per share in cash. Following the successful completion of the tender offer, Apollo managed funds will acquire all remaining shares not tendered in the tender offer through a second-step merger at the same price. The merger agreement provides for a “go-shop” period, during which Michaels will actively solicit, evaluate and potentially enter into negotiations with and provide due diligence access to parties that submit alternative proposals. The go-shop period is 25 calendar days, commencing March 3, 2021. The transaction will be financed through a combination of equity provided by Apollo managed funds as well as a committed debt financing package to be provided by Credit Suisse, Barclays, Wells Fargo, RBC Capital Markets, Deutsche Bank, Mizuho, and Bank of America. Michaels will have the right to terminate the merger agreement to enter into a superior proposal. In the event, Michaels terminates the transaction in lieu of superior proposal, then Michaels is obligated to pay a termination fee of $54.5 million while in another event, it is obligated to pay $104 million. In the event Apollo Global Management terminates the deal under certain scenario, Apollo is obligated to pay a reverse termination fee of $220 million. Upon the completion of the transaction, Michaels will become a privately held company and shares of MIK common stock will no longer be listed on any public market. As of March 16, 2021, Apollo Global Management commenced the cash tender offer.

The closing of the transaction is subject to customary closing conditions, including the expiration or termination of certain regulatory periods and the tender of shares representing at least a majority of the Company's outstanding common stock to Apollo. The transaction has been unanimously approved by the Board of The Michaels Companies. As of March 24, 2021, Federal Trade Commission has provided early termination of the waiting period under the Hart-Scott-Rodino for the transaction. As of March 27, 2021, go-shop period has been expired. As on April 8, 2021, approximately 57.95 million shares of common stock of Michaels, representing approximately 40.49% of the issued and outstanding Michaels shares, were tendered pursuant to the tender offer. The transaction is expected to close in Michaels' first half of the Company's fiscal year. As of April 8, 2021, the agreement extended the offering period to April 14, 2021 from April 12, 2021, unless further extended.

UBS Investment Bank is acting as exclusive financial advisor to Michaels and Will Shields, Craig Marcus, Sarah Young, Will Michener, Byung Choi, Jennifer Rikoski, Megan Bisk, Elaine Murphy, Michael McFalls, Ruchit Patel, Violetta Kokolus, Peter Alpert, Ama Adams, Randall Bodner, Chrystal LaRoche and Alyson Stewart of Ropes & Gray is acting as legal advisor to Michaels. Gregory Klein, Michael Kaplan, Atif Azher, Christopher Brown, Peter Guryan, Kelly Karapetyan, Tristan Brown, Harry N. Hudesman, Lori E. Lesser, Krista B. McManus and Russell Light of Simpson Thatcher & Bartlett LLP and Gregory A. Ezring, Danielle C. Penhall and Mark B. Wlazlo of Paul, Weiss, Rifkind, Wharton & Garrison LLP, are acting as legal advisors to Apollo and Credit Suisse acted as Apollo's financial advisor. Georgeson LLC is acting as information agent in the tender offer. Computershare Trust Company, N.A. is acting as depositary and paying agent in the tender offer for Apollo Global Management. Eli Katz from Latham & Watkins LLP acted as the legal advisor to UBS Investment Bank in the transaction.