Patheon Special Committee Reaffirms Recommendation that Shareholders Reject Inadequate JLL Offer

    Provides Update on Recent Developments Including the Successful Outcome
    of the OSC Proceedings That Forced JLL to Terminate its Side Deal

    TORONTO, April 24 /CNW/ - The Special Committee of Independent Directors
of Patheon Inc. ("Patheon") (TSX:PTI) today announced that it will unanimously
recommend that the Board reaffirm its recommendation that shareholders reject
the unsolicited offer (the "Offer") by JLL Patheon Holdings LLC ("JLL" or the
"Offeror") to acquire, at a price of US$2.00 each, any and all of the issued
and outstanding restricted voting shares (the "Restricted Voting Shares") of
Patheon not already held by JLL or its affiliates and associates.
    The Special Committee notes that JLL, in its Notice of Extension,
Variation and Change dated April 22, 2009, has made no changes to its Offer
other than those required by the April 16, 2009 order from the Ontario
Securities Commission ("OSC"), including the extension of the expiry of the
Offer to 6:00 p.m. (Toronto time) on May 7, 2009.
    In determining to make its recommendation, the Special Committee
considered a number of factors, including the independent valuation by BMO
Capital Markets, which 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, and an inadequacy opinion it had received from Goldman, Sachs & Co.
(see Note below), which concluded that the Offer is financially inadequate.
    Shareholders are advised to review the reasons for the Board's previously
announced recommendation that shareholders reject the JLL Offer, which are set
out in the March 25 Directors Circular. The Special Committee believes these
reasons remain unchanged except for those related to the Voting Agreement
described below, which JLL has been required to withdraw as a result of the
OSC order.
    The OSC's order remedies some of the concerns raised by the Special
Committee and numerous shareholders about the structure and process of the
Offer, including the unequal treatment of shareholders. However, the Special
Committee believes the Offer continues to be inadequate, opportunistic,
coercive and structurally unfair.
    Although JLL says that the Offer is a "liquidity opportunity", the Offer
is structured to allow JLL to make a "creeping take-over" of Patheon without
paying a control premium to shareholders. This makes the shares of Patheon
less liquid, to the disadvantage of other shareholders.
    The Special Committee expects that early next week the Board will mail a
Notice of Change to the Directors' Circular dated March 25, 2009, in response
to JLL's Notice of Extension, Variation and Change.

    Review of Recent Developments

    - OSC Orders Changes to the JLL Offer:

    The Special Committee succeeded in its efforts to have the Offer revised
to remove unfair treatment of shareholders that violated applicable securities
laws. It believed that a side deal (the "Voting Agreement") between JLL and a
group of shareholders (the "MOVA Group") led by Joaquin Viso resulted in the
Offer providing unequal treatment of holders of Restricted Voting Shares.
    JLL originally claimed the Special Committee's complaint to the OSC was
"without merit" but two days later applied for an exemption from securities
law requirements. After OSC staff recommended that the OSC reject this
application, JLL offered to terminate the Voting Agreement if that meant the
Special Committee's application would not proceed to a full hearing. OSC staff
then asked the Special Committee to put forward any additional conditions that
would be necessary to induce the Special Committee to withdraw its complaint.
These were largely accepted as part of the OSC order issued on April 16, 2009.
    Further details about the OSC proceedings were provided in Patheon's news
release of April 17, 2009 and will be set out in the Board's Notice of Change.

    - Discussions with Shareholders:

    Since the commencement of the Offer, the Special Committee and its
advisors have been in communication with numerous shareholders. The Special
Committee has been advised by shareholders it believes hold more than a
majority of the shares not held by JLL that they consider the Offer to be
    The Company's largest single shareholder, Joaquin Viso, has advised the
Board that he does not intend to accept the Offer. Although he is no longer
protected by the Voting Agreement with JLL as a result of the OSC proceeding,
there has been no indication that Mr. Viso has changed his intention not to
tender his shares.

    - Annual Meeting - April 29:

    As previously announced, Patheon's annual meeting of shareholders will be
held at 10:30 a.m. (Toronto time) on April 29, 2009. A number of shareholders
have expressed concerns about whether the Board of Directors is sufficiently
independent of JLL given the dealings between Mr. Viso and JLL, which has
three representatives on the Board. The Special Committee believes that a
board with a majority of independent directors is a key element to the success
of the recommended alternative of an independent Patheon continuing to execute
its business plan.

    - Discussions with JLL:

    During a discussion on April 13, 2009, Paul Currie, Chair of the Special
Committee again asked JLL to increase the Offer to a fair price, to add a
minimum tender condition to its Offer and to clarify how minority shareholders
would be protected if JLL were to increase its ownership of Patheon. JLL
continued to be unwilling to take any of these steps. The Special Committee
remains open to discussing changes to the Offer that would satisfy these

    Do Not Tender To The JLL Offer: Withdraw Any Shares Tendered

    Shareholders who have already tendered their Restricted Voting Shares to
the Offer are advised that they can withdraw the shares at any time until the
Offeror takes up and pays for them. Shareholders holding their Restricted
Voting Shares through a brokerage firm can contact their broker to withdraw
the Restricted Voting Shares on their behalf. Shareholders who would like to
withdraw their Restricted Voting Shares may also contact Kingsdale Shareholder
Services Inc., Patheon's information agent, at 1-866-851-3212.

    Note: On March 18, 2009, Goldman, Sachs & Co. rendered its opinion to the
Special Committee, subsequently confirmed in writing, that, as of March 18,
2009 and based upon and subject to the factors and assumptions set forth in
the written opinion, the consideration proposed to be paid to the holders of
the Restricted Voting Shares (other than the Offeror, any of its affiliates
and the MOVA Group) pursuant to the Offer was inadequate from a financial
point of view to such holders. The full text of the written opinion of Goldman
Sachs & Co., dated March 18, 2009, which sets forth the assumptions made,
procedures followed, matters considered and limitations on the review
undertaken in connection with the opinion is included as Appendix "B" to the
Directors' Circular. Goldman Sachs provided its opinion solely for the
information and assistance of the Special Committee in connection with its
consideration of the Offer. The Goldman Sachs opinion was not a recommendation
as to whether or not any holder of Restricted Voting Shares should tender
Restricted Voting Shares in connection with the Offer or take any other action
with respect to the Offer, any subsequent transaction pursuant to which the
Offeror or an affiliate of the Offeror may acquire all Restricted Voting
Shares not acquired pursuant to the Offer or any other matter.


    Patheon Inc. (TSX:PTI; 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 or on SEDAR at

    %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

Organization Profile

Patheon Inc

More on this organization

Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890