“The acquisition of Labopharm represents a unique opportunity for us to further strengthen our pain franchise through the addition of an established revenue stream in international markets with the potential upside provided by several product candidates,” said Jonathan Goodman, Paladin’s CEO, in a press release. “Moreover, Labopharm’s emerging specialty pharmaceutical technology platforms offer longer-term potential in promising new drug fields. Labopharm’s expertise and experience around its products and technologies, both in Canada and internationally, will complement our existing capabilities as we execute our growth strategy.”

 

Labopharm’s Board of Directors approved the transaction after a comprehensive review of the offer and its fairness to the company’s shareholders. The Board deemed the agreement to be in the best interest of the company and its shareholders and has recommended to the shareholders that they vote in favor of the agreement.

 

“The offer from Paladin provides compelling value, certainty and liquidity to our shareholders,” said Santo J. Costa, Chairman of the Labopharm Board, in a press release. “Following a comprehensive review of alternatives under the previously announced strategic review, the Board of Directors has concluded that this all-cash offer, which is at a significant premium to the trading price of Labopharm’s shares, is the best way to maximize shareholder value.”  

 

The closing of the transaction is subject to customary conditions, including the approval of 66 2/3 percent of the votes of Labopharm’s shareholders present or represented at a special meeting convened for the purpose of voting on the agreement. The closing is also subject to the approval of the Superior Court of Quebec. The shareholder voting meeting is expected to take place in early October, with details of the agreement to be sent to shareholders in early September.  

 

In keeping with the agreement, Labopharm is subject to customary non-solicitation covenants, and Paladin maintains the right to match any unsolicited superior proposal which Labopharm might accept. If the agreement should happen to be terminated, as a result of either the Board of Directors changing its recommendation or if Labopharm terminates the agreement in favor of entering a superior proposal, Labopharm is required to pay Paladin $750,000 as a termination fee.  

 

In the company’s consideration of the agreement, Canaccord Genuity Corp. was brought on as Labopharm’s financial advisor, as well as provision of a fairness opinion. Labopharm brought on Norton Rose OR LLP as its legal counsel for the agreement. Paladin brought on Davies Ward Phillips and Vineberg LLP as its legal counsel for the agreement.  

 

 

SOURCE: Labopharm press release