Swiss healthcare services giant Lonza has withdrawn its offer for Canadian CMO Patheon, citing value considerations, rejection of the bid by JLL and the availability of alternatives.
The major stumbling block for Lonza’s $3.55 per share bid appears to have been sometime rival suitor JLL, which owns 57 per cent of Patheon and has been against the deal since it was tabled in August.
And, while JLL’s own $2 per share offer expired in August, the group’s stake in the contract manufacturing organisation (CMO) is likely to block other potential suitors, or at least those not willing to offer a significant premium.
The announcement, which comes just days after Lonza and Patheon extended the exclusivity deadline for talks, also details that the firms have “terminated discussions regarding other strategic options that would not involve the sale of JLL’s shares.”
Patheon said that: “Although due diligence had been substantially completed and Lonza and Patheon continued to explore various strategic options that could be in the best interests of the two companies, they were unable to agree to acceptable terms for such a transaction."
JLL has not yet issued a statement on the matter.
Despite withdrawing its bid, Lonza maintained that it is still interested in entering the contract pharmaceutical formulation and manufacturing space, explaining that such a move fits with its growth strategy.
Lonza spokesman Dominik Werner told Outsourcing-pharma that: “This potential move is a logical step in Lonza's stated strategy to develop its offering across the full pharmaceutical manufacturing value chain.
“We've been looking at developing a 'finished dosage development and manufacturing' capability for several years for both small molecule and biological active ingredients.”
He added that talks are ongoing regarding alternative options, but could not provide additional details for reasons of confidentiality.