Ontario Securities Commission Orders Revisions to JLL Bid



    TORONTO, April 17 /CNW/ - The Special Committee of Independent Directors
of Patheon Inc. ("Patheon") (TSX:PTI) today announced that the Ontario
Securities Commission (the "OSC") has ordered JLL Patheon Holdings LLC ("JLL")
to revise its unsolicited offer (the "Offer") to acquire any and all of the
restricted voting shares (the "Restricted Voting Shares") of Patheon and to
take certain other steps before JLL can proceed with its Offer.
    The revisions and other steps the OSC has required JLL to take, which are
described in more detail below, are intended to ensure equal treatment of
Patheon shareholders and include the termination of JLL's side deal with a
group of shareholders (the "MOVA Group"), led by Joaquin Viso, and an
extension of the Offer.
    The Special Committee is gratified that the OSC took steps to remedy the
structural and process concerns regarding the JLL Offer, including the unequal
treatment of shareholders, raised by the Special Committee and numerous
shareholders. The Special Committee continues to have confidence in the
long-term prospects of Patheon, which all shareholders can enjoy by rejecting
the opportunistic JLL Offer.

    
    Under the order issued yesterday by the OSC, JLL must satisfy the
following conditions in order for it to proceed with its Offer:

    -   JLL's side deal with the MOVA Group will be terminated;

    -   JLL will provide a certification to the effect that no oral or
        written agreement, arrangement or understanding, formal or informal,
        direct or indirect, currently exists or will be entered into or
        agreed to during the Offer and for a period of 120 days following its
        expiry with any shareholder (including the MOVA Group) of Patheon in
        respect of the Offer or any second-step transaction, or Patheon or
        any of its securities, including the acquisition or voting thereof,
        other than in connection with a second-step transaction in which all
        shareholders are to receive the same consideration as the
        consideration under the Offer or all shareholders tendering to the
        Offer receive the same consideration as that paid to shareholders in
        the second-step transaction;

    -   The MOVA Group will provide a similar certification with regard to
        JLL;

    -   JLL will make amendments to its Offer circular, and will issue a news
        release to make full disclosure of the terms of the OSC's decision
        and of any consequential changes resulting from it; and

    -   JLL will extend the Offer for a period of at least 15 days following
        the mailing of a notice of variation in respect of these amendments.
    

    The OSC made this order following the completion of the previously
announced OSC proceedings arising from the Special Committee's application
challenging the legality of the Offer. The OSC decision dismisses the
application, provided that the above conditions are satisfied. The OSC
provided oral reasons and said that it had not yet determined whether it will
issue written reasons.
    As previously announced, in the course of discussions with OSC staff in
connection with these proceedings, JLL agreed that the side deal with the MOVA
Group would be terminated. Accordingly, the OSC did not make an express ruling
on the legality of that agreement. In its oral reasons, the OSC said that it
had the authority to cease trade the Offer, but did not propose to do so
because of a proposal made by JLL to avoid a hearing by accepting certain
conditions. The OSC also stated that, in the context of its consideration of
the exemptive relief application made by JLL, it had concerns with respect to
the Offer as it related to the equal treatment of shareholders. OSC staff made
submissions at the hearing in support of the positions of the Special
Committee.
    The Special Committee believes that the result of the OSC proceedings
vindicates its view that JLL was not treating all shareholders equally and
that the agreement with the MOVA Group violated Ontario's securities laws. As
a result of the OSC's order, if JLL is to pursue the Offer, it will be unable
to continue to provide unequal treatment to shareholders either in the Offer
or in a second-step transaction effected within 120 days.
    If JLL continues to pursue the Offer, the earliest date on which the
Offer could expire would be May 2, 2009 (if JLL were to mail a notice of
variation complying with the OSC conditions on April 17). Accordingly
shareholders need take no action with regard to the Offer at this time.
    As previously announced, the Board of Directors of Patheon has determined
that, based on the unanimous recommendation of the Special Committee, the
Offer is INADEQUATE and advises holders of Restricted Voting Shares of Patheon
to NOT TENDER their shares to the Offer. BMO Capital Markets has delivered an
independent valuation to the Special Committee indicating that, as of February
16, 2009, the fair value of the Restricted Voting Shares is in the range of
US4.20 to US$5.00.
    The Special Committee believes that Patheon remaining an independent
company and executing its business plan can permit Shareholders to realize
substantial value, well in excess of the Offer, by retaining their investment
in the Company and benefitting from the realization of Patheon's potential.
The Special Committee also believes that an important element of the
achievement of this goal is that Patheon have a Board of Directors that
includes a majority of independent directors.
    Shareholders who have tendered their Restricted Voting Shares to the
Offer and wish to obtain advice or assistance in withdrawing their shares
should contact their broker or Kingsdale Shareholder Services Inc., Patheon's
information agent, at the phone number below.

    ABOUT PATHEON

    Patheon Inc. (TSX:PTI; www.patheon.com) is a leading global provider of
contract development and manufacturing services to the global pharmaceutical
industry. Patheon prides itself in providing the highest quality products and
services to more than 300 of the world's leading pharmaceutical and
biotechnology companies. Patheon's services range from preclinical development
through commercial manufacturing of a full array of dosage forms including
parenteral, solid, semi-solid and liquid forms. Patheon uses many innovative
technologies including single-use disposables, Liquid-Filled Hard Capsules and
a variety of modified release technologies.
    Patheon's comprehensive range of fully integrated Pharmaceutical
Development Services includes pre-formulation, formulation, analytical
development, clinical manufacturing, scale-up and commercialization. Patheon
can take customers direct to clinic with global clinical packaging and
distribution services and Patheon's Quick to Clinic(TM) programs can
accelerate early phase development project to clinical trials while minimizing
the consumption of valuable API.
    Patheon's integrated development and manufacturing network of 11
facilities, and 6 development centers across North America and Europe, strives
to ensure that customer products can be launched with confidence anywhere in
the world.

    Caution Concerning Forward-Looking Statements

    This news release may contain forward-looking statements which reflect
management's expectations regarding the Company's future growth of operations,
performance (both operational and financial) and business prospects and
opportunities. These statements are made in the context of the risks and
uncertainties that are outlined in the Company's public documents, which can
be accessed on our website at www.patheon.com or on SEDAR at www.sedar.com.
    %SEDAR: 00001700E




For further information:

For further information: Special Committee: Information Agent for the
Special Committee, Kingsdale Shareholder Services, 1-866-851-3212; Media: John
Lute, Lute & Company, (416) 929-5883, email jlute@luteco.com

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