JLL bid “irrelevant”, says Patheon after win in Canadian Courts

28-Jul-2009 - Last updated on 29-Jul-2009 at 10:36 GMT

In the latest twist in an increasing bitter takeover battle, the Ontario Superior Court of Justice has rejected JLL’s bid to oust directors elected to the board of Canadian CMO Patheon in April.

JLL had also sought to add Ramsey Frank, Paul Levy and Thomas Taylor to the directorial candidate list in an effort, according to Patheon, to “disrupt and undermine the actions” of the Special Committee it set up to assess the offer.

Full details of the Court’s ruling are due to be published in the next few days. Patheon said that it intends to seek costs against JLL in connection with the proceedings.

JLL, which has built up a 39 per cent holding in Patheon, has made repeated attempts to buy the contract manufacturing organisation (CMO) over the last eight months, maintaining its initial $183m (€142m), or $2 per share, valuation.

Patheon has consistently resisted these efforts. In February its Special Committee described the offer as “opportunistic” and designed to take advantage of stock-market related fluctuations at the time the bid was tabled.

Offer a distraction, JLL extends deadline

While Patheon did not respond to Outsourcing-pharma’s request for comment, Paul Currie who chairs its Special Committee set out the firm’s position in a statement released shortly after the latest ruling.

He said that the JLL Offer is “increasingly irrelevant” adding that: “Patheon's shares have traded well above the offer price for a prolonged period. Equity and credit markets have improved since the Offer was first announced."

“The Company and its shareholders would benefit from the removal of the distraction of the Offer. The Special Committee believes JLL should either terminate its Offer or make a new offer than reflects the substantially higher true value of the Company."

Currie also said that: “JLL continues to state that it has convertible preferred shares that could be converted into a significant number of Restricted Voting Shares, but JLL does not state clearly that converting those shares would not be economic for JLL in the current share price range.”

New York-based JLL also issued a statement in response to the ruling, extending its offer for Patheon by a further 10 days.