- Enhanced Independence Of Board Better Positions Patheon To Realize
Potential Value As An Independent Company
TORONTO, May 4 /CNW/ - The Special Committee of Independent Directors of
Patheon Inc. ("Patheon") (TSX:PTI) today recommended that shareholders prevent
the possibility of a "creeping takeover" of their Company by not tendering
their restricted voting shares ("Restricted Voting Shares") to the unsolicited
offer (the "Offer") by JLL Patheon Holdings LLC ("JLL"). The JLL Offer for
"any and all" Restricted Voting Shares it does not already hold is scheduled
to expire on May 7, 2009.
JLL's Bid Remains Inadequate
Patheon's Board of Directors as a whole and the Special Committee have
determined that the Offer is inadequate. The independent valuation by BMO
Capital Markets, which was required under applicable securities laws,
concluded that the value of the Restricted Voting Shares as at February 16,
2009 was in the range of US$4.20 to US$5.00 per share.
The Special Committee has been advised by shareholders it believes hold
more than a majority of the Restricted Voting Shares not held by JLL that
these shareholders also consider the Offer to be inadequate.
JLL's Bid Remains Coercive
The Special Committee, with the support of shareholders, successfully
forced JLL to amend its Offer to remove the side deal between JLL and a group
of shareholders led by Joaquin B. Viso. However, the JLL bid remains
structurally coercive and unfair to other Patheon shareholders:
The Offer is structured as an "any and all" bid, not subject to a minimum
tender condition. This structure means JLL may acquire some shares even if
most shareholders reject the Offer. It allows JLL to effect a "creeping
take-over" of Patheon without paying a fair price to shareholders.
JLL disclosed in the April 22, 2009, amendment to its Offer that it
intends to pursue a subsequent acquisition or "squeeze-out" transaction to
acquire all of the remaining Restricted Voting Shares if a "significant
percentage" of the Restricted Voting Shares are deposited under the Offer. In
certain circumstances, JLL would be entitled to vote shares acquired under the
Offer as part of the minority approval required for any such "squeeze-out"
transaction. Accordingly, any shares tendered under the Offer could assist JLL
in effecting a "squeeze-out" transaction at an unfair price.
Independent Patheon Remains the Superior Alternative
The Special Committee believes that it would be in the best interests of
Patheon shareholders, as a whole, to reject JLL's inadequate Offer. The
alternative to the Offer that the Special Committee is recommending to
shareholders is that Patheon remain an independent company and continue to
execute its business plan. The Special Committee believes that shareholders
can realize more value by retaining their investment in Patheon and benefiting
from the realization of Patheon's potential than by tendering to the JLL
At the annual meeting of shareholders of Patheon held on April 29, 2009
shareholders voted to elect independent directors Roy F. Graydon and G. Wesley
Voorheis to replace Joaquin B. Viso and Wesley P. Wheeler, the Chief Executive
Officer of Patheon.
"Shareholders have clearly indicated their desire for more independent
members of the Board of Directors," said Paul Currie, Chairman of the Special
Committee. "This is consistent with the Special Committee's view that an
independent board is a key element in the successful achievement of Patheon's
business plan as an independent company."
Mr. Currie noted that, as CEO, Wesley Wheeler continues to have the
strong support of the Special Committee for his leadership of the successful
execution of a substantial restructuring of Patheon's business which has
positioned Patheon well for future growth.
Patheon shareholders can help maintain the independence of their company
simply by not tendering their shares to the JLL Offer. Any shares that have
been tendered can be withdrawn until the expiry of the offer. For assistance
in withdrawing shares previously tendered to the Offer, shareholders can call
Kingsdale Shareholder Services at 1-866-851-3212.
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
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