JLL says it will fight Lonza’s Patheon bid

pharmafile | September 1, 2009 | News story | Manufacturing and Production JLL, Patheon 

Lonza's attempt to buy Canadian contract manufacturer Patheon will not go unopposed by private equity group JLL, which has been in pursuit of a takeover of the firm for several months.

However, JLL has indicated it will not try to force its own offer through for the time being ''in order to permit Patheon to resume normal business operations''.

In a forthright statement released to the press, JLL said it will reject Lonza's proposal to acquire of all outstanding restricted voting shares in Patheon, adding that it ''is not interested in selling its position in Patheon at this time''.

Lonza's bid of $3.55 per share is a hefty premium on JLL's own offer of $2.00, which has been dismissed by Patheon's management as opportunistic and undervaluing the business. The Canadian firm's management favours Lonza's bid but still seems to harbour hopes of remaining independent.

JLL's position is formidable, however, as it has picked up a majority stake in Patheon's outstanding restricted voting shares over the last few months. The private equity firm says it is entitled to vote all of its Restricted Voting Shares on any matter submitted to a vote of Patheon's shareholders, including the election of directors.

''JLL will not enter into negotiations regarding the Lonza proposal and Patheon shareholders should be aware that a transaction with Lonza can not occur without JLL's support,'' said the private equity firm.

Lonza would need two garner 67% of the outstanding shares to proceed with its bid, it claims.

JLL confirmed that it held a 57% position at the expiry of its offer on 26 August, adding that it would pay shareholders who tendered their stakes on 31 August.

The private equity firm insisted that its own offer would now not be raised or extended and in the meantime it intends to focus on ''growing the business and creating value''.

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