Lonza has submitted a bid of approximately $460 million to acquire Patheon.
"Our interest in Patheon is consistent with Lonza's stated strategy of expanding our offering across the pharmaceutical manufacturing value chain. An acquisition of Patheon would take us into the complementary activities of finished dosage development and manufacturing for both small molecule and biological active ingredients. With Patheon, Lonza would be in a unique position to offer its customers manufacturing capability across the complete supply chain," said Stefan Borgas, Lonza's chief executive officer.
Reuters reported that Mr. Borgas noted in a conference call, "The next step on the manufacturing side would be to expand our capabilities towards finished-dosage development and production capabilities. Patheon is one great way for us to get into this field." He also remarked that Lonza was negotiating with "two or three other companies," according to the report.
Lonza has signed a confidentiality and standstill agreement with the company, and Patheon has agreed not to negotiate an acquisition transaction with any party other than Lonza for a period ending September 30, 2009, subject to extension in certain circumstances. During this period, Lonza will be perform due diligence. The terms of the exclusivity period permit Patheon to respond to an unsolicited superior acquisition proposal, subject to certain restrictions.
In recent months, Patheon has been involved in an contentious takeover battle with investor JLL Holding. Patheon's Special Committee of independent directors advised shareholders to reject private equity firm JLL's offer for the company's outstanding shares, arguing that the tender offer of $2 per share was too low. The Lonza bid comes in at $3.55 per share. JLL holds 57% of Patheon's shares.