JLL Partners said that it will commence an offer for any issued or outstanding shares it does not already own in Patheon Inc. (TSX: PTI), a Canadian provider of contract development and manufacturing services to the global pharmaceutical industry. The offer would be for US$2 per share, or a 138% premium to last Friday’s closing price. JLL currently holds around a 30% stake in Patheon.
JLL Patheon Holdings, LLC, an affiliate of JLL Partners, Inc. (“JLL”), today announced that it intends to commence an offer for any or all of the issued and outstanding Restricted Voting Shares of Patheon, Inc. (TSX: PTI) (“Patheon” or the “Company”) that it does not already own at an offer price of U.S. $2.00 cash per share, which is equivalent to C $2.54 cash per share based on the current exchange rate.
The offer price represents a 138% premium over the U.S. $0.84 (C $1.07) per share closing price of the Restricted Voting Shares on the TSX on December 5, 2008, and an 81% premium over the U.S. $1.10 (C $1.40) average per share closing price of the Patheon Restricted Voting Shares during the thirty-day period up to and including December 5, 2008.
JLL currently beneficially owns approximately 30% of the outstanding Restricted Voting Shares of Patheon on an as-converted basis. JLL believes its bid would constitute an “insider bid” under the applicable rules of the Ontario Securities Commission and the Autorite des marches financiers, and as such, the Board of Directors of Patheon will be required to form a special committee and that committee will be required to appoint an independent valuator. JLL will include the formal valuation in its take-over bid circular to be mailed to shareholders. Mailing of the offer will take place shortly after receiving the formal valuation and is not contingent on the support of Patheon’s Board of Directors.
The offer for any or all of the Restricted Voting Shares of Patheon will be subject to customary conditions, including no material adverse change shall have occurred at Patheon. If sufficient Patheon shares are tendered in the offer, JLL intends to take the appropriate steps by way of compulsory acquisition to acquire the remaining outstanding Restricted Voting Shares of Patheon. The offer is fully financed by JLL and will not require the Company to incur any incremental debt to complete the purchase of any or all of the Patheon Restricted Voting Shares.
JLL hopes to be in a position to mail the take-over bid circular in January 2009.
JLL Partners is a New York-based leading private equity investment firm with $3.2 billion of capital under management. JLL’s investment philosophy is to partner with outstanding management teams and invest with them in companies that they can continue to grow into market leaders. JLL has invested in a variety of industries, with special focus on financial services, building products and healthcare services and medical products. More information on JLL can be found on their website, www.jllpartners.com.
Patheon Inc. (TSX: PTI; www.patheon.com) is a leading provider of contract development and manufacturing services to the global pharmaceutical industry. Patheon provides products and services to more than three hundred of the world’s leading pharmaceutical and biotechnical companies. Patheon’s technologies and services range from pre-clinical development to manufacturing a full array of dosage forms. Their global network of ten manufacturing facilities and seven development centers ensures that customer products can be launched with confidence anywhere in the world.