Winnipeg Free Press - PRINT EDITION

Battle on to take over drug manufacturer Patheon

  • Print
TORONTO -- Initial investor optimism over a potential friendly takeover bid for Canadian drugmaker Patheon Inc. (TSX:PTI) was tempered Friday after Patheon's biggest shareholder said it won't support the US$458.5-million offer.

Patheon shares soared Friday, but those gains were moderated when investment firm JLL Partners Inc., which has been attempting a hostile takeover of Patheon since last December, said it isn't interested in selling its majority stake in the company.

Patheon shares closed up 80 cents or 31 per cent at $3.38.

The new bid, from Swiss-based global contract manufacturer Lonza Group AG, is worth US$3.55 per share. Patheon said it trumps JLL Partners' offer of $2 per share.

Paul Currie, chairman of Patheon's special committee of independent directors, said the company is reviewing the bid "very carefully."

"This is an offer from a compelling and strategic partner with complementary businesses and is 75 per cent in excess of the competing offer," Currie said. "It's beneficial to customers, employees and shareholders."

But JLL issued a statement Friday indicating it would fight the Lonza bid.

"JLL will not enter into negotiations regarding the Lonza proposal and Patheon shareholders should be aware that a transaction with Lonza cannot occur without JLL's support," the New York-based company said.

JLL said it will not extend its own offer past the Aug. 26 deadline.

The Lonza proposal is conditional upon at least 67 per cent of Patheon's outstanding shares being tendered to the bid. Since JLL owns 57 per cent of Patheon, Lonza's bid cannot be approved without JLL's backing.

"The completion of the Lonza offer will depend, in our view, on JLL's overall receptivity to it and whether JLL is willing to surrender its own shares at US$3.55 per share," said Desjardins Securities analyst Maher Yaghi.

Yaghi said the Lonza offer is in line with Desjardins' C$3.75 target price valuation for Patheon.

Patheon's board of directors has put its support behind the Lonza bid.

The drugmaker went to court in May in an effort to remove board candidates nominated by JLL and stop the firm from voting its restricted voting shares acquired under the bid.

JLL has extended its offer for Patheon numerous times since its first bid, and has acquired 57 per cent of Patheon's stock.

The transaction is subject to Lonza satisfactorily completing its due diligence investigations and the approval of each company's board of directors.

Patheon is one of the world's largest global contract drug manufacturers, doing business with multinational firms.

-- The Canadian Press

Republished from the Winnipeg Free Press print edition August 22, 2009 B8

Fact Check

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories?
Please use the form below and let us know.

* Required
  • Please post the headline of the story or the title of the video with the error.

  • Please post exactly what was wrong with the story.

  • Please indicate your source for the correct information.

  • Yes

    No

  • This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.

  • Cancel

Having problems with the form?

Contact Us Directly
  • Print

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

Have Your Say

Comments are open to Winnipeg Free Press print or e-edition subscribers only. why?

Have Your Say

Comments are open to Winnipeg Free Press Subscribers only. why?

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.

letters

Make text: Larger | Smaller

LATEST VIDEO

Blake Wheeler talks about past season

View more like this

Photo Store Gallery

  • Marc Gallant/Winnipeg Free Press. Local- Peregrine Falcon Recovery Project. Baby peregrine falcons. 21 days old. Three baby falcons. Born on ledge on roof of Radisson hotel on Portage Avenue. Project Coordinator Tracy Maconachie said that these are third generation falcons to call the hotel home. Maconachie banded the legs of the birds for future identification as seen on this adult bird swooping just metres above. June 16, 2004.
  • A  young goose stuffed with bread from  St Vital park passers-by takes a nap in the shade Thursday near lunch  –see Bryksa’s 30 day goose challenge Day 29-June 28, 2012   (JOE BRYKSA / WINNIPEG FREE PRESS)

View More Gallery Photos

Poll

Do you think Manitoba needs stronger regulations for temporary workers?

View Results

View Related Story

Ads by Google