JLL: Time Not Right To Sell Patheon

TORONTO (Reuters) – JLL Partners is not in talks to sell its majority stake in Canadian drugmaker Patheon (PTI.TO: Quote) to Switzerland’s Lonza (LONN.VX: Quote), a JLL partner said on Monday, saying it was the wrong time to cash out.

Lonza launched a $460 million bid for Patheon on Friday, driving shares up nearly 30 percent with the offer that would give the Canadian company an enterprise value of some $700 million.

But the offer was rejected outright by JLL, a turnaround specialist that typically holds onto company stakes for between four and six years before selling for a profit. That sent Patheon sliding on Monday morning by nearly 7 percent.

Lonza’s bid of $3.55 a share for Patheon offered a potential windfall to the majority shareholder, which owns 57 percent of Patheon. Even so, JLL said it was not interested.

“I’ll cut right through it, there’s nothing to do with Lonza,” Ramsey Frank, a partner at New York-based JLL Partners said by telephone from Europe.

“It’s dead on arrival. We are not selling,” said Frank, also a Patheon board member, adding JLL was not in talks with the Swiss company.

“We look to time our exits for the work we planned to do to be completed and for a better selling environment,” said Frank.

“We can never guess when that’s going to be, but I don’t think it’s today.”

Patheon shares were down 7.1 percent in midday trade in Toronto at C$3.14 per share.

JLL has been building its stake in Patheon since last December, when it launched an offer at $2 a share for the then-struggling company.

A special committee formed to review the offer has opposed the JLL offer as too low.

Patheon shares dropped 24 Canadian cents to C$3.14 on Monday on the Toronto Stock Exchange.

($1=$1.07 Canadian)

(Reporting by Pav Jordan and Scott Anderson)