Cephalon rejects takeover bid Published: Tuesday, April 05, 2011
0diggsdigg ShareThis0By BRIAN McCULLOUGH Staff Wirter
EAST WHITELAND -- Cephalon?s board of directors Tuesday rejected the bid by Valeant Pharmaceucticals to purchase the Frazer-based biopharmaceuctical company for $5.7 billion.
Cephalon said the $73-a-share offer doesn?t properly reflect the company?s true value.
Meanwhile, Valeant filed paperwork with the Securities and Exchange Commission to have all members of Cephalon?s board removed and replaced with their own members.
In a letter to Valeant CEO J. Michael Pearson, Cephalon wrote that ?Valeant?s non-binding proposal is inadequate and not in the best interests of Cephalon?s shareholders.?
The Cephalon board gave four main reasons for its rejection, according to a statement released by the company Tuesday evening:
? The Valeant Non-Binding Proposal Does Not Fully Reflect Cephalon?s Standalone Value.
?The board determined that Valeant?s proposed price significantly undervalues the company, including the greater value obtainable from the company?s strategic plan, especially the value inherent in the company?s diversified and robust portfolio of marketed and pipeline products,? Cephalon said. ?The board believes that the Valeant non-binding proposal is an opportunistic attempt by Valeant to shift this value to Valeant and its shareholders and away from (Cephalon?s) shareholders.?
? Valeant Values Cephalon Using ?Worst-Case Scenario.?
?By Valeant?s own admission, its analysis of Cephalon?s value is based on a worst-case scenario, which is an inappropriate methodology,? the statement said.
? Valeant?s Timing is Opportunistic. ?The 30-day average Cephalon share price of $56.74 on which Valeant based their proposal is near the stock?s 52-week low,? Cephalon said. ?Valeant?s proposal represents virtually no premium to Cephalon?s 52-week high.? Continued...The Valeant Non-Binding Proposal Ascribes Little to No Value to Cephalon?s Pipeline.
?Cephalon has created one of the broadest pipelines in the industry, with 10 late-stage product candidates targeted at novel and ?best-in-class? therapeutics,? the board statement said. ?This includes six indications with The Valeant Non-Binding Proposal Ascribes Little to No Value to Cephalon?s Pipeline.
?Cephalon has created one of the broadest pipelines in the industry, with 10 late-stage product candidates targeted at novel and ?best-in-class? therapeutics,? the board statement said. ?This includes six indications with blockbuster potential which are projected to begin launching in the next three years. These programs represent tremendous value that is not reflected in Valeant?s current proposal.
?Additionally, this proposal ignores the proven ability of the Cephalon board and management to successfully identify, develop and commercialize pipeline opportunities,? the company said
Kevin Buchi, Cephalon?s CEO, added: ?This is all about shareholder value. The Cephalon board of directors is committed to maximizing value for our shareholders, and we take this responsibility very seriously.?
On March 30, Valeant announced it intended to start a consent solicitation process during this week to remove all of Cephalon?s directors and replace them with Valeant?s nominees.
Ontario-based Valeant will have 60 days from April 8 to come up with a majority of Cephalon shareholders to change the board.
which are projected to begin launching in the next three years. These programs represent tremendous value that is not reflected in Valeant?s current proposal.
?Additionally, this proposal ignores the proven ability of the Cephalon board and management to successfully identify, develop and commercialize pipeline opportunities,? the company said
Kevin Buchi, Cephalon?s CEO, added: ?This is all about shareholder value. The Cephalon board of directors is committed to maximizing value for our shareholders, and we take this responsibility very seriously.?
On March 30, Valeant announced it intended to start a consent solicitation process during this week to remove all of Cephalon?s directors and replace them with Valeant?s nominees.
Ontario-based Valeant will have 60 days from April 8 to come up with a majority of Cephalon shareholders to change the board.
Cheers Vin
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