Cephalon Recommends Shareholders Reject Valeant Nominees
Share:
o Cephalon Board of Directors Best Positioned to Maximize Value for Shareholders
FRAZER, Pa., April 7, 2011 - Cephalon, Inc. (NASDAQ: CEPH) said today in a preliminary consent revocation statement filed with the Securities and Exchange Commission (SEC) that its Board of Directors has recommended that shareholders reject Valeant Pharmaceuticals International, Inc.'s proposals to remove and replace Cephalon's current Board of Directors and not deliver any consent solicitation cards to Valeant. On April 5, 2011, the Board rejected Valeant's unsolicited proposal to purchase the Company for $73 per share, concluding that the non-binding proposal is inadequate and not in the best interests of Cephalon's shareholders.
In urging Cephalon's shareholders to reject Valeant's proposals and to not deliver any consent solicitation cards to Valeant, Cephalon noted that:
o Cephalon's Current Board of Directors is Best Positioned to Maximize
Value for Cephalon's Shareholders. Cephalon's Board of Directors, which
is predominantly composed of independent and disinterested directors,
has a strong track record of acting in shareholders' best interests.
The current Board of Directors is intimately familiar with Cephalon's
business, its day-to-day operations and its products and pipeline, and
is in the best position to continue to review, develop and adapt the
Company's plan to maximize value for all of the Company's stockholders.
Valeant's proposed nominees do not have this same knowledge of, and
experience with, Cephalon.
o Valeant Has No Duty to Act in Cephalon Shareholders' Best Interests.
The Board noted that Valeant has no duty to act in the best interests of
Cephalon's shareholders (including when selecting nominees to serve as
Cephalon directors) and that it would be in Valeant's and its
shareholders' interest to buy Cephalon at the lowest possible price.
o The Valeant Nominees May Not Be in a Position to Best Serve Cephalon
Shareholders' Interests. While Valeant has described its proposed
slate of directors as "independent", Cephalon's Board of Directors
believes that Valeant's nominees have been selected by Valeant simply to
facilitate the acquisition of Cephalon by Valeant on terms that are as
favorable to Valeant as possible. There is no guarantee that the
Valeant Nominees will vigorously negotiate with Valeant on behalf of
Cephalon's shareholders.
o The Valeant Nominees, if Elected, May Have Conflicts of Interest in Any
Dealings With Valeant. Notably, three of the seven Valeant nominees
served on Valeant's Board of Directors prior to its September 2010
merger with Biovail Corporation. At the time of the merger, each of
Messrs. Koppes, Kugelman and Lonner owned securities that were converted
into shares of common stock of Valeant. Valeant also agreed to
indemnify each of Messrs. Koppes, Kugelman and Lonner for actions
arising prior to the merger. Valeant has not addressed the potential
financial and personal conflicts of interest that each of Messrs.
Koppes, Kugelman and Lonner could have in respect of Valeant, and which
could potentially impact their views in respect of any sale of Cephalon
to Valeant.
Kevin Buchi, Cephalon's Chief Executive Officer, said, "Shareholders should have serious concerns about replacing their elected Board of Directors, who have an intimate knowledge of Cephalon's business, products and pipeline and a strong track record of acting in the best interests of shareholders, with a slate of nominees selected by Valeant to further Valeant's proposed acquisition of the Company.
He added, "The Cephalon Board of Directors is best positioned to maximize value for Cephalon's shareholders, and we take this responsibility very seriously."
On April 5th, Valeant filed a preliminary consent solicitation statement with the SEC in connection with its proposed consent solicitation. In the interests of allowing consideration of this matter on a timely basis by Cephalon's shareholders and significant participation in the process by Cephalon's many long-term shareholders, pursuant to the Company's by-laws, the Cephalon Board of Directors has set a record date for the consent solicitation of Friday, April 8, 2011. The consent solicitation period will last for 60 days from the date of the earliest dated consent delivered to the Company.
Deutsche Bank Securities Inc. and BofA Merrill Lynch are acting as financial advisors and Skadden, Arps, Slate, Meagher & Flom LLP is acting as Cephalon's legal counsel.
About Cephalon, Inc.
Cephalon is a global biopharmaceutical company dedicated to discovering, developing and bringing to market medications to improve the quality of life of individuals around the world. Since its inception in 1987, Cephalon has brought first-in-class and best-in-class medicines to patients in several therapeutic areas. Cephalon has the distinction of being one of the world's fastest-growing biopharmaceutical companies, now among the Fortune 1000 and a member of the S&P 500 Index, employing approximately 4,000 people worldwide. The company sells numerous branded and generic products around the world. In total, Cephalon sells more than 150 products in nearly 100 countries. More information on Cephalon and its products is available at http://www.cephalon.com/.
