Lonza and Patheon extend takeover talks deadline

Swiss drug company Lonza and Canadian drugmaker Patheon have extended an exclusivity and due diligence period to allow for continued discussions over Lonza's non-binding proposal to acquire Patheon.

A special committee of independent directors of Patheon and Lonza have extended the deadline from 30 September to 15 October.

Other terms of the bid, including that Patheon will not negotiate an acquisition transaction with any other party but can respond to an unsolicited acquisition proposal, remain unchanged.

Last month Lonza offered Patheon US$3.55 per share, valuing the company at around US$460m. This is higher than the US$2 per share offered by Patheon's majority shareholder, private equity firm JLL, last December.

JLL's bid expired in August, which Paul Currie, chairman of the special committee, said was both "overdue and welcome".

"It has been clear for some time that JLL's US$2 per share offer would not succeed. The special committee determined months ago that the bid was inadequate, opportunistic and coercive," he said.

The special committee continues to believe that pursuing the Lonza proposal is in the best interests of Patheon and all its shareholders. It is now trying to hold a special meeting of shareholders on 15 December to "ensure that it does not interfere with the pursuit of the Lonza proposal or an alternative transaction involving Lonza".

"There is no assurance that any transaction involving Lonza will be completed or as to the terms of any such transaction," the special committee added.

Patheon employs more than 4,000 people and provides contract development and manufacturing services to the pharmaceutical industry from pre-formulation to clinical packaging.