Dr. Reddy's Laboratories intends to make a recommended public offer for OctoPlus N.V.
(Thomson Reuters ONE) -
This is a joint press release by Dr. Reddy's Laboratories Ltd. ("Dr. Reddy's")
and OctoPlus N.V. ("OctoPlus" or the "Company") pursuant to the provisions of
Section 5, paragraph 1, and Section 7, paragraph 4 of the Dutch Public Takeover
Decree (Besluit openbare biedingen Wft) in connection with the intended public
offer by Dr. Reddy's, or a wholly owned subsidiary of Dr. Reddy's, for all the
issued and outstanding ordinary shares in the capital of OctoPlus. This press
release is an announcement that a conditional agreement has been reached between
OctoPlus and Dr. Reddy's in connection with a potential public offer and does
not constitute, or form part of, an offer or any solicitation of an offer, to
acquire or subscribe or sell any securities in OctoPlus. Any offer will be made
by means of the publication of an offer memorandum only. This announcement is
not for release, publication, dissemination, or distribution, in whole or in
part, in or into Australia, Canada and Japan.
Dr. Reddy's Laboratories intends to make a recommended public offer for OctoPlus
N.V.
Later this morning at 10.00 CET the company will hold a conference call for
media and analysts in which CEO Jan Egberts will give an introduction on the
intended offer and will answer questions. The dial-in number is +31 (0)
45 6316902 - Conference ID 4571659
Transaction highlights
* Dr. Reddy's and OctoPlus have reached conditional agreement on a recommended
all cash offer by Dr Reddy's for all issued and outstanding ordinary shares
in the capital of OctoPlus at an offer price per share of ? 0.52 (cum
dividend)
* The offer price represents a premium of 30% over the closing price of
OctoPlus of 19 October 2012
* The Executive and Supervisory Boards of OctoPlus fully support and
unanimously recommend the offer
* Members of the Executive Board have agreed to stay on in the employment of
OctoPlus during the transition period extending to 6 (six) months
immediately following the Settlement Date
* Onroerend Goed Beheer- en Beleggingsmaatschappij A. Van Herk B.V., LSP III
Omni Investments Coöperatief U.A., Signet Healthcare Partners, L.L.C., SR
One, Limited and certain individual members of the Executive and Supervisory
Boards of OctoPlus, together representing just over 50% of OctoPlus' issued
and outstanding shares, have irrevocably committed to tender their shares
under the intended offer
* The transaction will be financed with funds readily available at Dr.
Reddy's
* OctoPlus' identity and head office will be maintained
* Dr. Reddy's and OctoPlus agreed to enter into a business collaboration
agreement for investigational formulation research
Strategic rationale
* Extend the expertise and scientific capabilities of Dr. Reddy's in drug
formulation and injectables
* Further develop OctoPlus as a complex injectables research centre within the
organization of Dr. Reddy's
* Leverage existing skills and drive value in the complex generics space, in
addition to the fee for service business
Hyderabad/Leiden, 22 October 2012 - Dr. Reddy's (NYSE: RDY) and OctoPlus
(Euronext Amsterdam: OCTO) jointly announce that they have reached conditional
agreement in connection with an intended public offer by Dr. Reddy's, or a
wholly owned subsidiary of Dr. Reddy's, for all issued and outstanding ordinary
shares in the capital of OctoPlus at an offer price of ? 0.52 (cum dividend) in
cash (the "Offer Price") for each OctoPlus share (the "Offer").
The Offer Price represents a premium of 30% over OctoPlus' most recent closing
price and a premium of respectively 36%, 28% and 14% over OctoPlus' average
closing price for the past three, six and twelve months. Dr. Reddy's offer price
is also a significant premium over analyst estimates of OctoPlus valuation,
excluding Locteron over the past 2 years. After the emergence of All Oral
Hepatitis C treatments, the value of Locteron has eroded significantly.
The Offer values 100% of the issued and outstanding ordinary shares of OctoPlus
at ? 27.4 million.
The Executive Board and the Supervisory Board of OctoPlus fully support and
unanimously recommend the Offer to OctoPlus' shareholders.
Mr. GV Prasad, CEO Dr. Reddy's comments; "We are happy to have an R&D base in
the Leiden area and the acquisition gives us the ability to strengthen our
technological capabilities in the areas of drug delivery."
Mr. Jan Egberts, CEO of OctoPlus comments; "We are proud of the confidence Dr.
Reddy's has shown in our organisation. It reflects the success of the major
operational and organizational improvements we have implemented over the past
few years."
The intended public offer price reflects the value of OctoPlus after the recent
value erosion of Locteron. Over the last few months the value of Locteron has
significantly eroded, due to the ongoing emergence of All Oral Hepatitis C
treatments, which ultimately resulted in the recently initiated bankruptcy
liquidation filing of Biolex. Over the last few months, we have reviewed a
number of alternative strategies for our company. We have concluded that the
intended offer by Dr. Reddy's best serves the interest of our key stakeholders,
including our employees and shareholders.
OctoPlus' development and manufacturing platform perfectly fits with Dr. Reddy's
marketing abilities. Dr. Reddy's is keen to further expand into the fast growing
Fee for Service business. To that extend they will retain OctoPlus as a
specialist stand alone entity to develop specialty generics for Dr. Reddy's.
OctoPlus will become Dr. Reddy's centre of excellence for complex injectables
with retention of our highly skilled and dedicated professionals in our Leiden
facility.
The intended public offer is a recognition of our hard work over the past years,
transforming OctoPlus into a company with a strong position in development and
manufacturing of difficult to formulate injectables. We are proud of our recent
progress including the generation of three specialty generics products over the
past twelve months and our 40% revenue growth in our Fee for Service business
compared to last year. The intended offer will give OctoPlus the opportunity to
grow its successful platform faster and stronger than would have been possible
on a stand alone basis."
Strategic rationale
Dr. Reddy's has been following the activities of OctoPlus over a longer period
with great interest and got convinced the Company has acquired competence in
drug formulation and difficult to formulate injectables. In the opinion of Dr.
Reddy's, OctoPlus' expertise in injectable specialty generics like Liposomes and
Microspheres is interesting and its ability to improve the formulations of both
existing and new drugs is believed to be complementary to Dr Reddy's existing
capabilities.
Dr. Reddy's believes all stakeholders will benefit from the Offer as it enables
Dr. Reddy's to extend its expertise in drug formulation and injectables and
OctoPlus to further develop as a complex injectables research centre. In
addition, it is the intention to leverage existing skills and drive value in the
complex generics space besides the Fee for Service business. Both parties aim to
position OctoPlus as a stand-alone centre for drug formulation and injectables
within the organisation of Dr. Reddy's.
Recommendation and support
OctoPlus' Executive Board and the Supervisory Board (together the "Boards")
fully support and unanimously recommend the Offer to the OctoPlus shareholders.
After careful consideration, the Boards believe this transaction is in the best
interests of the Company and its stakeholders including its clients,
shareholders, partners and employees and recommend the shareholders of OctoPlus
to tender their shares under the Offer. ABN AMRO Bank N.V. has, as independent
advisor, issued a fairness opinion to the Boards, stating that the Offer Price
is fair to the shareholders of OctoPlus from a financial point of view.
Irrevocable undertakings
Onroerend Goed Beheer- en Beleggingsmaatschappij A. Van Herk B.V., LSP III Omni
Investments Coöperatief U.A., Signet Healthcare Partners, L.L.C. and SR One,
Limited have signed irrevocable undertakings to support and accept the Offer,
subject to customary conditions. The combined shareholding of these parties
represent 49.4% of the issued and outstanding ordinary shares in OctoPlus.
The individual members of the Boards holding together 1.1% of the issued and
outstanding shares in OctoPlus have also agreed to an irrevocable undertaking to
tender their shares under the Offer.
Dr. Reddy's, with the help of the Company, will continue to seek additional
support for the Offer from the Company's shareholders.
Employees
Dr. Reddy's recognises that OctoPlus' employees will play a pivotal role in the
future of the Company and they will be treated accordingly. It is anticipated
that the global number of employees of the Company and its subsidiaries will not
materially change as a result of the Offer.
Governance
After completion of the Offer, the Supervisory Board will be reduced from 5 to
3 members, of whom one will be independent and Dr. Reddy's will nominate two.
The three current members of the Executive Board (Raad van Bestuur) have agreed
to stay on for an interim period after closing of the transaction.
Financing of the Offer
The Offer values 100% of the issued and outstanding OctoPlus shares at ? 27.4
million. Dr. Reddy's will finance the Offer from readily available funds and the
financing of the Offer will not be subject to the consent of any third party and
shall have no financing condition. This announcement constitutes a certain funds
announcement as required by Section 7, paragraph 4 of the Dutch Public Takeover
Decree (Besluit openbare biedingen Wft).
Pre-offer and offer conditions
The commencement of the Offer is subject to the satisfaction or waiver of the
following pre-offer conditions customary for a transaction of this kind: (i) the
Offeror having completed confirmatory due diligence into certain aspects of the
Company, (ii) no material adverse effect having occurred, (iii) no material
breach of the merger protocol by the Company or the Boards (iv) the AFM having
approved the offer memorandum, (v) the Boards not having revoked or amended
their recommendation, (vi) no Competing Offer (as defined below) having been
announced, (vii) the Company not having issued, or granted rights to subscribe
for, securities in the Company to other persons, (viii) the AFM not having
notified that investment firms will not be allowed to cooperate with the
settlement of the Offer, (ix) the Company having received resignation letters
from the Company's Supervisory Board members stepping down as of settlement of
the Offer, (x) the Company having received a positive, unconditional advice from
its works council in respect of the Offer, (xi) trading of the shares in the
Company on Euronext Amsterdam not having been suspended or ended, (xii) no offer
condition having become permanently incapable of satisfaction, (xiii) no order,
stay judgment or decree having been issued which prohibits, restricts or
materially delays the transactions and (xiv) the parties not having terminated
the merger protocol.
If and when made, the consummation of the Offer will be subject to the
satisfaction or waiver of the following offer conditions: (i) a minimum
acceptance of 92.5% of the OctoPlus issued and outstanding share capital, (ii)
the general meeting of OctoPlus having adopted certain resolutions, (iii) no
material adverse effect having occurred, (iv) no material breach of the merger
protocol by either the Company or the Boards (v) the Boards not having revoked
their recommendation, (vi) no Competing Offer (as defined below) having been
announced, (vii) the Company not having issued, or granted rights to subscribe
for, securities in the Company to other persons, (viii) the AFM not having
notified that investment firms will not be allowed to cooperate with the
settlement of the Offer, (ix) trading of the shares in the Company on Euronext
Amsterdam not having been suspended or ended, and (x) no order, stay judgment or
decree having been issued which prohibits, restricts or materially delays the
transactions.
Dr. Reddy's will have the right to waive certain of the pre-offer and offer
conditions, including the minimum acceptance threshold and no material adverse
effect having occurred.
Competing offer
Dr. Reddy's and OctoPlus may terminate the merger protocol in the event a bona
fide third-party offeror makes an offer which, in the reasonable opinion of the
Boards, is a more beneficial offer than the Offer and (i) exceeds the Offer
Price by at least 10%, and (ii) is determined by the Boards to be substantially
more beneficial to the Company, specifically taking into account the identity
and track record of such party, the consideration to be received by
shareholders, the likelihood of completion, the other terms and conditions of
the offer, and the interests of all stakeholders in the Company (a "Competing
Offer").
In the event of a Competing Offer, Dr. Reddy's will be given the opportunity to
match such offer, in which case the Boards shall continue to support the Offer.
OctoPlus has entered into customary undertakings not to solicit third party
offers.
In the event that the merger protocol terminates because of a Competing Offer or
a material breach by OctoPlus, Dr. Reddy's will be entitled to a termination fee
equal to ? 0.5 million.
In addition, in the event that the merger protocol terminates because of a
material breach by Dr. Reddy's, OctoPlus will be entitled to a termination fee
of ? 0.5 million.
Indicative timetable and regulatory announcements
Dr. Reddy's and OctoPlus will use their best efforts to procure the fulfilment
of the commencement and offer conditions as soon as reasonably practicable. The
employee consultation procedures with OctoPlus' works council will commence
immediately.
Dr. Reddy's intends to launch the Offer as soon as practically possible and in
accordance with the applicable statutory timetable. It is currently expected
that the offer memorandum will be submitted to the AFM for approval within five
weeks from the date of this announcement and that the Offer, if made, will
commence during the first half of December.
Extraordinary general meetings by OctoPlus
As a consequence of the impairment loss in 2012 in relation to Biolex' voluntary
petition for liquidation under Chapter 7 (see OctoPlus' press release dated 9
July 2012), OctoPlus' equity has decreased and following continuing losses over
the last months, it has now become clear that OctoPlus' current equity is below
the level of half of its issued and paid-up share capital. Therefore, in
accordance with section 2:108a of the Dutch Civil Code, OctoPlus will in due
course convene an Extraordinary General Meeting to discuss any appropriate
measures it has taken in this respect.
In addition and possibly in combination with above mentioned EGM, OctoPlus will
convene an informative Extraordinary General Meeting at least 6 business days
before closing of the offer acceptance period in accordance with Section 18
Paragraph 1 of the Dutch Public Takeover Decree (Besluit openbare biedingen Wft)
to discuss the Offer and decide on certain proposals regarding the governance of
the Company post-completion of the Offer. Any resolutions adopted will be
conditional on the completion of the Offer.
Business collaboration agreement
At the date of signing the merger protocol, OctoPlus and Dr. Reddy's agreed on
the key-terms for entering into a business collaboration agreement for
investigational formulation research. Dr. Reddy's will provide OctoPlus with fee
for service and milestone payments as consideration for services to be rendered
by OctoPlus for a maximum amount of ? 2 million during the next six months.
These payments are subject to certain development milestones, which, if not met,
will result in the conversion of the payments into a loan. In case OctoPlus is
not able to repay the loan, Dr. Reddy's might opt for conversion of the loan
into newly issued ordinary shares in the Company at the then prevailing share
price level. In the coming period, Dr. Reddy's and OctoPlus will work out the
key-terms into a final business collaboration agreement.
Advisors
Kempen& Co is acting as financial advisor and Linklaters LLP as legal advisor to
Dr. Reddy's in connection with the Offer.
Loyens & Loeff N.V. is acting as legal counsel to OctoPlus and ABN AMRO Bank
N.V. has provided the fairness opinion to OctoPlus.
Company profile Dr. Reddy's
Dr. Reddy's Laboratories Ltd. (NYSE: RDY) is an integrated global pharmaceutical
company, committed to providing affordable and innovative medicines for
healthier lives. Over the last fiscal year the company generated revenues of
over $ 2.0 billion. Through its three businesses - Pharmaceutical Services and
Active Ingredients, Global Generics and Proprietary Products - Dr. Reddy's
offers a portfolio of products and services including APIs, custom
pharmaceutical services, generics, biosimilars, differentiated formulations and
NCEs. Therapeutic focus is on gastro-intestinal, cardiovascular, diabetology,
oncology, pain management, anti-infective and pediatrics. Major markets include
India, USA, Russia and CIS, Germany, UK, Venezuela, S. Africa, Romania, and New
Zealand. For more information: www.drreddys.com
Company profile OctoPlus
OctoPlus is a specialty pharmaceutical company focused on the development and
manufacture of improved injectable pharmaceuticals based on proprietary drug
delivery technologies that exhibit fewer side effects, improved patient
convenience and a better efficacy/safety balance than existing therapies.
OctoPlus also focuses on the development of long-acting, controlled release
versions of known protein therapeutics, peptides and small molecules, including
specialty generics. OctoPlus is a leading European provider of advanced drug
formulation and clinical scale manufacturing services to the pharmaceutical and
biotechnology industries, with a focus on difficult-to formulate active
pharmaceutical ingredients.
OctoPlus is listed on Euronext Amsterdam by NYSE Euronext under the symbol OCTO.
More information about OctoPlus can be found on: www.octoplus.nl
Further information
Dr. Reddy's
For further information about Dr. Reddy's, please contact the Investors and
Financial Analysts of Dr. Reddy's:
Kedar Upadhye: telephone number +91-40-66834297 or send an e-mail to
kedaru(at)drreddys.com
Saunak Savla: telephone number +91-40-49002135 or send an e-mail to
saunaks(at)drreddys.com
Milan Kalawadia (USA): telephone number +1 908-203-4931 or send an e-mail to
mkalawadia(at)drreddys.com
Media:
S Rajan: telephone number +91-40-49002445 or send an e-mail to
rajans(at)drreddys.com
OctoPlus
For further information about OctoPlus, please contact Investor Relations:
telephone number +31 (71) 524 1064 or send an e-mail to Investor Relations at
IR(at)octoplus.nl.
Restrictions
This announcement is for information purposes only and does not constitute an
offer or an invitation to acquire or dispose of any securities or investment
advice or an inducement to enter into investment activity. This announcement
does not constitute an offer to sell or issue or the solicitation of an offer to
buy or acquire the securities of Dr. Reddy's or OctoPlus in any jurisdiction.
The distribution of this press release may, in some countries, be restricted by
law or regulation. Accordingly, persons who come into possession of this
document should inform themselves of and observe these restrictions. To the
fullest extent permitted by applicable law, Dr. Reddy's and OctoPlus disclaim
any responsibility or liability for the violation of any such restrictions by
any person. Any failure to comply with these restrictions may constitute a
violation of the securities laws of that jurisdiction. Neither Dr. Reddy's, nor
OctoPlus, nor any of their advisors assumes any responsibility for any violation
by any person of any of these restrictions. Any OctoPlus shareholder who is in
any doubt as to his position should consult an appropriate professional advisor
without delay. This announcement is not to be published or distributed in or to
Australia, Canada and Japan.
Notice to US holders of OctoPlus Shares
The Offer will be made for the securities of a Dutch company and is subject to
Dutch disclosure requirements, which are different from those of the United
States. Some of the financial information included in this announcement has been
prepared in accordance with International Financial Reporting Standards and thus
may not be comparable to financial information of US companies or companies
whose financial statements are prepared in accordance with generally accepted
accounting principles in the United States. The Offer will be made in the United
States pursuant to the applicable US tender offer rules and otherwise in
accordance with the requirements of the Dutch Public Takeover Decree.
Accordingly, the Offer will be subject to disclosure and other procedural
requirements, including with respect to withdrawal rights, offer timetable,
settlement procedures and timing of payments, that are different from those
applicable under US domestic tender offer procedures and law.
The receipt of cash pursuant to the Offer by a US holder of OctoPlus shares may
be a taxable transaction for US federal income tax purposes and under applicable
state and local, as well as foreign and other tax laws. Each holder of OctoPlus
shares is urged to consult his independent professional advisor immediately
regarding the tax consequences of acceptance of the offer.
It may be difficult for US holders of OctoPlus shares to enforce their rights
and claims arising out of the US federal securities laws, since OctoPlus is
located in a country other than the United States, and some or all of its
officers and directors may be residents of a country other than the United
States. US holders of OctoPlus shares may not be able to sue a non-US company or
its officers or directors in a non-US court for violations of the US securities
laws. Further, it may be difficult to compel a non-US company and its affiliates
to subject themselves to a US court's judgment.
In accordance with normal Dutch practice and pursuant to Rule 14e-5(b) of the US
Exchange Act, Dr. Reddy's or its nominees, or its brokers (acting as agents),
may from time to time make certain purchases of, or arrangements to purchase,
OctoPlus shares outside of the United States, other than pursuant to the Offer,
before or during the period in which the Offer remains open for acceptance.
These purchases may occur either in the open market at prevailing prices or in
private transactions at negotiated prices. Any information about such purchases
will be disclosed as required in the Netherlands, will be reported to the
Netherlands Authority for the Financial Markets (Stichting Autoriteit Financiële
Markten) and disclosed in the offer memorandum or by press release.
Forward Looking Statements
This press release may include "forward-looking statements" and language
indicating trends, such as "anticipated" and "expected." Although Dr. Reddy's
and OctoPlus believe that the assumptions upon which the irrespective financial
information and their respective forward-looking statements are based are
reasonable, they can give no assurance that these assumptions will prove to be
correct. Neither Dr. Reddy's nor OctoPlus, nor any of their advisors accepts any
responsibility for any financial information contained in this press release
relating to the business or operations or results or financial condition of the
other or their respective groups.
Click here for the press release in PDF format:
http://hugin.info/137076/R/1650910/532475.pdf
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: OctoPlus N.V. via Thomson Reuters ONE
[HUG#1650910]
Unternehmensinformation / Kurzprofil:
Datum: 22.10.2012 - 05:00 Uhr
Sprache: Deutsch
News-ID 194445
Anzahl Zeichen: 27997
contact information:
Town:
Leiden
Kategorie:
Business News
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"Dr. Reddy's Laboratories intends to make a recommended public offer for OctoPlus N.V."
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