Special Committee Responds to JLL Statements After Expiry of Inadequate
TORONTO, Aug. 28 /CNW/ - The Special Committee of Independent Directors
of Patheon Inc. ("Patheon" or "the Company") (TSX:PTI) commented today on the
recent expiry of the unsuccessful bid by JLL Patheon Holdings LLC ("JLL") for
any and all of the outstanding restricted voting shares of Patheon (the
"Shares) and recent statements by JLL regarding the previously announced
proposal by Lonza Group AG ("Lonza") to acquire all of the outstanding Shares
at a price of US$3.55 per share.
"After nine months, the expiry of the JLL bid is both overdue and
welcome," said Paul Currie, Chairman of the Special Committee. "It has been
clear for some time that JLL's US$2.00 per share offer would not succeed. The
Special Committee determined months ago that the bid was inadequate,
opportunistic and coercive. In the end, the JLL bid was rejected by the
holders of 62% of Patheon's Restricted Voting Shares at the time the bid was
launched and accordingly JLL cannot take Patheon private as was its stated
Patheon continues to explore the Lonza proposal. In recent announcements
and in correspondence with the Special Committee, JLL has indicated its
opposition to the Lonza proposal and the provision of information to Lonza
that would allow it to perform its confirmatory due diligence.
The Special Committee has issued a letter to JLL in response, portions of
which are extracted below:
"The Special Committee carefully considered all relevant factors prior to
engaging in discussions with (Lonza) and throughout the process that led
to the receipt from Lonza of its non-binding proposal dated August 20,
2009 (the "Lonza Proposal"). The Special Committee believed then and
believes now that the pursuit of the Lonza Proposal is in the best
interests of Patheon and its shareholders. The Special Committee has
received very positive feedback from a number of the shareholders that
for nine months have rejected your inadequate offer and these
shareholders have asked that the Special Committee explore fully the
opportunities presented by the Lonza Proposal.
(JLL) gave rise to the process engaged in by the Special Committee by
making an unsolicited, inadequate and coercive bid for the restricted
voting shares of Patheon. By doing so, JLL clearly put Patheon in play.
Thereafter, the non-conflicted Directors of Patheon have made every
effort to discharge their important responsibilities and in doing so have
taken reasonable and prudent steps in an effort to maximize shareholder
value. The shareholders of Patheon who refused to tender to JLL's
manifestly inadequate bid (who represented 62% of the outstanding
restricted voting shares prior to JLL's conversion of its preferred
shares) expect no less.
The Special Committee has continuously and consistently informed you that
it is not opposed to JLL acquiring Patheon, but has also indicated that
if JLL is to do so, this must occur at a fair price. The price reflected
in the Lonza Proposal is at a significant premium (77%) to the price at
which JLL proposed that other shareholders tender their shares to its
The Lonza Proposal includes a non-binding summary of proposed terms that,
at least as matters now stand, includes a condition that at least 66 2/3%
of the Company's restricted voting shares are tendered to an offer by
Lonza for all such shares. That condition, however, may be waived by
Lonza. Accordingly, a transaction involving the acquisition by Lonza of
the millions of restricted voting shares not owned by JLL may well occur
without the concurrence or support of JLL. Moreover, there are a number
of possible strategic transactions with Lonza that would be beneficial to
the Company and its shareholders that can be completed without the
concurrence of JLL.
The Special Committee is well aware of the terms of the Investor
Agreement dated April 27, 2007 between JLL and Patheon (the "Investor
Agreement") and has complied with that Agreement in every respect.
Nothing that the Special Committee has done or will do in furtherance of
the Lonza Proposal or otherwise has contravened or will contravene the
Investor Agreement in any way. ...
... Although JLL is a significant shareholder of Patheon, it is not the
only shareholder, and has no right to dictate unilaterally the future
course of Patheon, or to prevent the non-conflicted Directors of Patheon
from taking reasonable and prudent steps that are clearly in the best
interests of the Company and its many other shareholders. Conversely, it
is at best unfair and inappropriate for JLL, having put Patheon in play
by making its manifestly inadequate offer, to take steps to prevent the
non-conflicted Directors of Patheon from exploring and pursuing
alternatives that are in the best interests of Patheon and its many other
shareholders, and that might be available in the circumstances. JLL's
palpable self-interest in attempting to prevent the non-conflicted
Directors of Patheon from discharging their responsibilities in this
regard, and in attempting to frustrate or prevent any competing offer
that Lonza might make, cannot trump the rights and interests of the
Company and the many other shareholders of Patheon.
The Special Committee has at all times acted, and will continue to act,
in the best interests of the Company and its shareholders."
Lonza's exclusive negotiation period continues until September 30, 2009,
subject to extension. There can be no assurance that any transaction involving
Lonza will be completed or as to the terms of any such transaction.
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 10
facilities, and seven 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.
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 firstname.lastname@example.org