The Cross-Border Biotech Blog

Biotechnology, Health and Business in Canada, the United States and Worldwide

Update Released by Patheon’s Special Commmittee

Patheon’s Special Committee provided an update today:

“The Special Committee of Independent Directors of Patheon Inc. … today provided an update on its discussions with Lonza Group AG … regarding Lonza’s previously announced non-binding proposal to acquire all of the outstanding restricted voting shares of the Company at a price of US$3.55 per share. The Special Committee also updated shareholders on Patheon’s litigation connected with the unsuccessful offer by JLL Patheon Holdings…”

You can check out the rest

“Lonza’s confirmatory due diligence related to its proposal is proceeding on schedule. Patheon’s financial results for the third quarter ended July 31, 2009, announced on September 14, were consistent with the information regarding expected results that was provided to Lonza in connection with the submission of its proposal.

The Special Committee continues to believe that pursuing the Lonza proposal is in the best interests of Patheon and all its shareholders. The Special Committee and Lonza are also discussing a number of possible strategic transactions with Lonza that would be beneficial to the Company and its shareholders and that can be completed without the concurrence of JLL. As previously disclosed, Patheon has agreed to an exclusivity period which expires September 30, 2009, subject to extension in certain circumstances. There can be no assurance that any transaction involving Lonza will be completed or as to the terms of any such transaction.

Requisitioned Meeting Postponement

Patheon’s legal action against JLL and the JLL nominees to Patheon’s Board of Directors, which was announced on May 26, continues to proceed on an expedited basis. However, the expected timetable for various steps in, and the trial of, the action has been delayed as a result of actions by JLL and its nominees, including document production delays and a third-party claim made by JLL against each of Patheon’s independent directors. A trial date for the action has not been set, but it is now expected that the trial will not be held until after October 30, 2009.

On July 28, 2009, the Special Committee announced that it had determined to postpone until October 30, 2009 the Special Meeting of Shareholders called in response to the previously announced requisition by Joaquin Viso and Olga Lizardi. Among the factors that the Special Committee considered in deciding to postpone the meeting was the need to resolve the current legal action, which may, among other things, affect the voting of JLL’s shares, before the meeting is convened so that shareholders will have access to all relevant information.

At the time of the postponement announcement, the Court was targeting mid- to late October 2009 for the trial of Patheon’s action. In light of a number of developments since the meeting date was set, including the current timing for the resolution of Patheon’s action, the Special Committee has determined to postpone the Special Meeting of Shareholders to December 15, 2009. This scheduled date should also ensure that the meeting does not interfere with the pursuit of the Lonza proposal or an alternative transaction involving Lonza.

On September 2, 2009, Joaquin Viso and Olga Lizardi commenced an application in the Ontario Superior Court of Justice seeking an order requiring the Special Meeting of Shareholders to be held no later than October 30, 2009. The Special Committee unanimously believes that this would not be in the best interests of Patheon and all of its shareholders. The Special Committee questions the purpose of this application and the Viso shareholders’ continued pursuit of the requisition since, if JLL is permitted to vote all of its shares at the requisitioned meeting, there is no possibility for the requisition to be successful without the support of JLL, and JLL, not the requisitioning shareholders, will determine the outcome. Moreover, the investor agreement between Patheon and JLL prohibits JLL from requisitioning, or soliciting another shareholder to requisition, a meeting to alter the structure of the Board, and Patheon has alleged in its legal action against JLL that the requisition involves a breach by JLL of that agreement.

The Special Committee intends to oppose the application. No hearing date for the application has yet been set.”

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


Get every new post delivered to your Inbox.

Join 128 other followers