Swiss law expert counters Alcon Independent Director Committee's legal position in proposed merger with Novartis
(Thomson Reuters ONE) -
Novartis International AG / Swiss law expert counters Alcon Independent Director Committee's legal position in proposed merger with Novartis processed and transmitted by Hugin AS. The issuer is solely responsible for the content of this announcement.
* Merger decision must be approved by the entire board of the company and
cannot be delegated to, nor vetoed by the Independent Directors Committee
(IDC)
* Expert confirms that Novartis-nominated directors are not legally conflicted
solely because of being nominated by a majority shareholder
* Alcon board, including Novartis-nominated directors, can validly approve a
merger with a majority shareholder. Novartis may validly participate in the
Alcon shareholders' vote on the merger
* Contrary to the IDC's view, the Alcon full board may validly amend the
Organizational Regulations
* Creation and funding of the Alcon IDC litigation trust with funds of Alcon
is contrary to Swiss law, also creating a conflict of interest between the
IDC members' fiduciary duties as Alcon board members and their duties to the
litigation trust
Basel, September 30, 2010 - Novartis announced today that a Swiss corporate law
expert reviewed and validated the Novartis legal position in the proposed merger
with Alcon Inc under the Swiss Merger Act. The review was conducted following
the publication of the legal opinion issued by the Alcon Independent Directors
Committee (IDC) on June 28, 2010. The Swiss legal expert confirmed that the
opinion and the actions of the Alcon IDC are not consistent with Swiss law.
The Novartis merger proposal with Alcon was announced on January 4, 2010.
Novartis maintains that simplifying the ownership of Alcon is in the best
interests of the stakeholders, and ultimately the patients who benefit from the
products.
"Merger transaction decisions must be made by the full board and cannot be
subject to a veto right by a sub-set or committee of directors," according to
Professor Dr. Peter Nobel, law professor at the University of Zurich and
professor emeritus at the University of St Gallen, Switzerland and a recognized
expert in the areas of financial and corporate law. "The Alcon IDC's assertions
that IDC approval is required to approve a merger with Novartis is inconsistent
with well-accepted principles of Swiss law." He further states: "There is
appropriate protection of minority shareholders under Swiss law. This includes a
review of the proposed exchange ratio by a fairness opinion, as well as the
judicial 'class action-like' appraisal claim remedy."
The opinion by Professor Nobel further confirms the Novartis view that directors
who are nominated by Novartis are not conflicted solely as a result of being
nominated by a majority shareholder. Accordingly, neither Swiss law nor Alcon
Organizational Regulations provide a valid basis for considering
Novartis-nominated board members as conflicted solely as a result of having been
nominated by a majority shareholder.
Professor Nobel also concludes that an Alcon board that consists of
Novartis-nominated directors can validly approve a merger transaction with a
majority shareholder and as such, would not be rendered void under Swiss law.
This means that the IDC's stated strategy of blocking an approved merger would
not prove successful under Swiss law. Equally, Novartis is allowed to vote its
Alcon shares at an Alcon shareholders' meeting approving the merger.
In addition, the IDC's view, that the current version of the Alcon
Organizational Regulations cannot be amended by the full board, is not in line
with the duty of the board under Swiss law to adopt and amend the organizational
regulations. In particular, the board is not prevented from changing such
regulations pending any corporate transaction. "This is not about moving
goalposts during a game - we are concerned with Swiss Company law and not with a
sporting event," Professor Nobel added.
On July 8, the IDC issued a press release announcing the creation of an
irrevocable litigation trust, funded solely by $50 million of Alcon assets. The
actions by the members of the IDC in creating this litigation trust are
inconsistent with Swiss law and are not in the interests of Alcon, possibly
creating a breach of fiduciary duties by these board members. In addition, the
IDC members have thereby assumed legally binding fiduciary duties to act in the
specific interests of the trust and of the minority shareholders alone. These
duties are in direct conflict with the IDC members' fiduciary duties to act in
the interest of Alcon Inc as a whole.
Disclaimer
The foregoing release contains certain forward-looking statements relating to
the Group's business, which can be identified by terminology such as "proposed,"
"can," "may," "proposal," "would," or similar expressions, or by express or
implied discussions regarding the potential merger with Alcon, or regarding
potential synergies, strategic benefits or opportunities expected to result from
the acquisition of 77% of Alcon or from the proposed merger with Alcon; or
regarding potential future sales or earnings of the Novartis Group or any of its
divisions or business units. You should not place undue reliance on these
statements. Such forward-looking statements reflect the current views of the
Group regarding future events, and involve known and unknown risks,
uncertainties and other factors that may cause actual results to be materially
different from any future results, performance or achievements expressed or
implied by such statements. There can be no guarantee that the proposed merger
with Alcon will be completed in the expected form or within the expected time
frame or at all. Nor can there be any guarantee that Novartis will be able to
realize any of the potential synergies, strategic benefits or opportunities
expected to result from the acquisition of 77% of Alcon or from the proposed
merger with Alcon, or that Novartis will be able to realize them in the expected
time. Neither can there be any guarantee that the Novartis Group, or any of its
divisions or business units, will achieve any particular financial results. In
particular, management's expectations could be affected by, among other things,
uncertainties regarding actual or potential legal proceedings, including, among
others, litigation seeking to prevent the merger from taking place, product
liability litigation, litigation regarding sales and marketing practices,
government investigations and intellectual property disputes; disruption from
the merger making it more difficult to maintain business and operational
relationships, and relationships with key employees; unexpected clinical trial
or other product development results, including additional analyses of existing
clinical data or unexpected new clinical data; unexpected regulatory actions or
delays or government regulation generally; the Group's ability to accurately
predict future market conditions; the Group's ability to obtain or maintain
patent or other proprietary intellectual property protection; competition in
general; government, industry, and general public pricing and other political
pressures; uncertainties regarding the ongoing government debt crisis and the
after-effects of the recent global financial and economic crisis; uncertainties
regarding future global exchange rates and uncertainties regarding future demand
for our products; uncertainties involved in the development of new
pharmaceutical products; the impact that the foregoing factors could have on the
values attributed to the Group's assets and liabilities as recorded in the
Group's consolidated balance sheet; and other risks and factors referred to in
Novartis AG's current Form 20-F on file with the US Securities and Exchange
Commission. Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results may vary
materially from those described herein as anticipated, believed, estimated or
expected. Novartis is providing the information in this press release as of this
date and does not undertake any obligation to update any forward-looking
statements as a result of new information, future events or otherwise.
About Novartis
Novartis provides healthcare solutions that address the evolving needs of
patients and societies. Focused solely on healthcare, Novartis offers a
diversified portfolio to best meet these needs: innovative medicines,
cost-saving generic pharmaceuticals, preventive vaccines, diagnostic tools and
consumer health products. Novartis is the only company with leading positions in
these areas. In 2009, the Group's continuing operations achieved net sales of
USD 44.3 billion, while approximately USD 7.5 billion was invested in R&D
activities throughout the Group. Headquartered in Basel, Switzerland, Novartis
Group companies employ approximately 102,000 full-time-equivalent associates and
operate in more than 140 countries around the world. For more information,
please visithttp://www.novartis.com.
# # #
Novartis Media Relations
Central media line : +41 61 324 2200
Eric Althoff
Novartis Global Media Relations
+41 61 324 7999 (direct)
+41 79 593 4202 (mobile)
eric.althoff(at)novartis.com
e-mail: media.relations(at)novartis.com
For Novartis multimedia content, please visit www.thenewsmarket.com/Novartis
For questions about the site or required registration, please
contact:journalisthelp(at)thenewsmarket.com.
Novartis Investor Relations
Central phone: +41 61 324 7944
Susanne Schaffert +41 61 324 3769 North America:
Pierre-Michel +41 61 324 1065 Richard Jarvis +1 212 830 2433
Bringer
Thomas +41 61 324 8425 Jill Pozarek +1 212 830 2445
Hungerbuehler
Isabella Zinck +41 61 324 7188 Edwin Valeriano +1 212 830 2456
e-mail: e-mail:
investor.relations(at)novartis.com investor.relations(at)novartis.com
[HUG#1447806]
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Novartis International AG
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Source: Novartis International AG via Thomson Reuters ONE
Unternehmensinformation / Kurzprofil:
Datum: 30.09.2010 - 07:02 Uhr
Sprache: Deutsch
News-ID 43416
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contact information:
Town:
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Kategorie:
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