Patheon Commences Legal Action Against JLL and Responds to Dissident Requisition



    TORONTO, May 26 /CNW/ - The Special Committee of Independent Directors of
Patheon Inc. ("Patheon") (TSX:PTI) today announced that Patheon has commenced
a legal action in the Ontario Superior Court of Justice against JLL Patheon
Holdings LLC ("JLL") and its nominees to Patheon's Board, Ramsey A. Frank,
Paul S. Levy and Thomas S. Taylor.
    The legal action is in respect of the conduct of JLL and its nominees in
connection with JLL's insider bid for the Restricted Voting Shares of Patheon
as well as related matters. The Statement of Claim sets out Patheon's
allegations against the JLL Board nominees and JLL and is requesting that the
Court make findings of breach of fiduciary duties, oppression, conspiracy and
breach of contract, the particulars of which are set out in the Statement of
Claim. A copy of the Statement of Claim is available on Patheon's website:
www.patheon.com.

    
    Patheon is seeking remedies from the Court including orders:

    -   prohibiting JLL from voting the Restricted Voting Shares acquired
        under its bid unless and until authorized to do so by further court
        order;

    -   removing the JLL nominees from the Board and restricting JLL's
        ability to appoint replacements;

    -   terminating JLL's Board representation and special approval rights
        under its investor agreement with Patheon;

    -   prohibiting JLL from taking up any further Restricted Voting Shares
        under its bid; and

    -   for significant monetary damages.
    

    "The Special Committee is taking this step to enforce Patheon's rights
and to continue to defend the best interests of all Patheon shareholders in
response to JLL's inadequate, opportunistic and coercive bid," said Paul
Currie, Chairman of the Special Committee.

    Dissident Requisition

    The Special Committee also announced that, pursuant to the powers
delegated to it by the Board, it has called a meeting of the shareholders of
Patheon to be held on September 11, 2009 to deal with the matters set out in
the previously announced requisition received from dissidents Joaquin Viso and
Olga Lizardi (the "Requisition"). A formal Notice of Meeting and Management
Information Circular containing relevant information that will allow
shareholders to make a decision at the meeting will be mailed to shareholders
several weeks before the meeting date.
    The Board has given the Special Committee the mandate to respond to the
Requisition to protect the interests of shareholders. The Special Committee
considered a number of factors in setting the September 11 meeting date,
including:

    
    -   the need to resolve current litigation, which may alter the
        composition of the Board and the shares that can be voted at the
        meeting, so that shareholders will have access to all information
        that could reasonably be expected to affect their vote;

    -   the importance of minimizing management distraction and not
        destabilizing the Board while JLL's hostile insider bid remains
        outstanding, or during the period following the bid when JLL might
        seek to complete a "subsequent acquisition transaction"; and

    -   the fact that the dissidents made their requisition less than a week
        after shareholders made clear their desire for a more independent
        Board at the April 29 annual shareholders meeting.
    

    "We strongly believe that it is important for the independent directors
who have acted to protect shareholder interests to continue to be able to do
so," said Mr. Currie. "This is especially important given that JLL continues
to pursue its bid and has stated its intention to pursue a related subsequent
acquisition or 'squeeze-out' transaction."
    As noted above, among the remedies being sought in the litigation
commenced against JLL is an order that would have the effect of prohibiting
JLL from voting the Restricted Voting Shares acquired under the Offer at the
meeting requisitioned by the dissidents.
    JLL's bid is currently scheduled to expire June 1.
    On June 12, 2009, Patheon is scheduled to release its financial results
for the fiscal second quarter ended April 30, 2009. Based on all information
provided to it to date, the Special Committee continues to believe that an
independent Patheon, successfully acting on its strategy, remains the best
available alternative for shareholders. Patheon shareholders can help maintain
the independence of their company simply by not tendering their shares to the
JLL bid.

    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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