Patheon Directors Win One Court Battle, Plan Another Against JLL
Tue, 05/19/2009 - 11:52am
Directors of Patheon have decided to launch legal action against a subsidiary of JLL Partners, in the latest effort to prevent the New York investment firm from gaining control of the pharmaceutical manufacturer. The company announced its plan Tuesday after the Ontario Superior Court ruled against JLL's effort to block expansion of the membership and mandate of a special committee of directors at Patheon Inc. The committee has urged shareholders to reject an offer of $2 per Patheon share from JLL Patheon Holdings LLC, and the two sides have battled for months in the courts and at the Ontario Securities Commission. On Thursday, Patheon announced that newly elected directors G. Wesley Voorheis and Roy T. Graydon would join an expanded special committee, which would include all directors except JLL's representatives. JLL asked the court Friday to block that move. The committee has argued JLL's offer is inadequate. It has also been trying to avoid a "creeping takeover" in which effective control of the board could swing to JLL without a clear majority of shareholders accepting the offer. The committee wants the deadline for JLL's offer to be extended beyond 6 p.m. ET on Tuesday. "The special committee continues to defend the best interests of all Patheon shareholders. In court, we successfully argued against JLL's coercive attempt to curtail the activities of the committee," said Paul Currie, chairman of the special committee. "Shareholders can be assured that the Special Committee is in no way intimidated by JLL's tactics as it attempts to pursue various avenues to take control of Patheon at an inadequate price. We will take all responsible and appropriate actions, including litigation, to protect Patheon shareholders." JLL has argued its offer is fair and provides an opportunity for Patheon's shareholders to get out of a thinly traded stock. It has also taken several steps to rework the offer in accordance with the OSC's requirements.