Patheon & JLL enter into litigation settlement

By Nick Taylor

- Last updated on GMT

Related tags: Contract manufacturing organisation, Stock, Corporate governance, Managing director, Patheon

Patheon and JLL are to end the legal actions between them by entering into a litigation settlement which establishes a board of directors and limits JLL acquiring additional restricted voting shares before April 27 2012.

JLL was unsuccessful in its attempt to acquire Patheon but before its bid expired the contract manufacturing organisation (CMO) took legal action to remove the investment group’s board nominees and restrict its ability to appoint replacements.

Now, following the break down of Lonza’s takeover attempt and with JLL owning 57 per cent of Patheon, the companies are attempting to end the dispute. One aspect of the settlement is an agreement, valid until March 2011, on the composition of the board of directors.

The new board will include Wes Wheeler, CEO of Patheon, Joaquin Viso, a shareholder in the CMO, and independent directors Derek Watchorn and Roy Graydon, who both sat on the Special Committee.

Brain Shaw will also be a board member as a new independent director. The remaining four places on the nine person board will be taken by three JLL nominees, who were not named in the press release or court documents, and one additional director selected by the investment group.

Patheon’s legal action had sought to remove Ramsey Frank, Paul Levy and Thomas Taylor, all managing directors at JLL, from its board. In their capacity at JLL Patheon Holdings all three are mentioned in the settlement but it is unclear if they will be nominated to the board.

Taylor will be appointed to the audit committee, along with Watchorn and Graydon, and this three person team will stay the same until Patheon’s year-end financial results, after which the board may change the committee.

The settlement also states that at meetings prior to March 2011 JLL will use its voting rights and “reasonable commercial efforts​” to re-elect the independent directors.

Standstill

For one year after the settlement comes into force JLL cannot acquire restricted voting shares and constraints will remain in place until April 27 2012. One aspect of the constraints is that the acquisition must comply with the ‘standstill’ provisions of the investor agreement.

Furthermore, if the acquisition is part of a takeover bid it “is subject to an irrevocable condition requiring the valid tender to the bid of at least a majority of the minority held shares​”.

Patheon will also pay $1.5m (€1m) in settlement costs.

The complete settlement document can be found here​.

Related news

Show more

Related products

show more

Validating The Simoa Technology

Validating The Simoa Technology

Frontage Laboratories | 01-Oct-2019 | Technical / White Paper

Frontage is the first and only laboratory to validate Quanterix’ Simoa HD1 Analyzer for performing immunoassays. Most of the advanced instruments used...

Related suppliers

Follow us

Products

View more

Webinars