11 /PRNewswire/ - Shire Pharmaceuticals Group plc (LSE: SHP.L; NASDAQ: SHPGY) (``Shire'') and BioChem Pharma Inc. (TSE: BCH - news; NASDAQ: BCHE - news; ``BioChem'') announced today that they have entered into an agreement to merge the two groups to form a leading global specialty pharmaceutical company. The Merger will be achieved through an exchange of shares, which values, on the basis of the current price of Shire ADSs, each BioChem Share at US$37 (C$54.4) and BioChem at approximately US$4.0 billion (C$5.9 billion) on a fully diluted basis.
* TRANSACTION HIGHLIGHTS
* The Merger:
* creates one of the world's leading global specialty pharmaceutical
* companies;
* broadens and enhances the product portfolio, with leading positions in
* ADHD and HIV, and deepens the project pipeline, with BioChem's early
* stage projects complementing those at a later stage in Shire;
* brings together complementary strengths of the merger partners,
* providing exciting future opportunities to market BioChem's development-
* stage projects through Shire's direct sales infrastructure;
* generates strong cashflow for reinvestment in the enlarged group's
* search and development strategy and, with opportunities for synergies, is
* expected to be accretive to Shire's earnings in the first full year; and
* creates an enlarged group which would have had combined unaudited pro
* forma revenues for the year ended 31 December 1999 of US$587 million.
Shire is an international specialty pharmaceutical company with a strategic focus on four therapeutic areas: central nervous system disorders, metabolic diseases, oncology and gastroenterology. The group has a sales and marketing infrastructure with a broad portfolio of products, with its own direct marketing capability in the US, Canada, UK, Republic of Ireland, France, Germany, Italy and Spain and with plans to add Japan by 2004. Shire also covers other significant pharmaceutical markets indirectly through distributors and sales coverage continues to grow.
BioChem is an international specialty pharmaceutical company dedicated to the development and commercialisation of innovative products for the prevention and treatment of human diseases, with a focus on infectious diseases and cancer. BioChem's first therapeutic product, 3TC/Epivir, has become the cornerstone of HIV infection/AIDS combination therapies, most recently being launched as part of GlaxoWellcome's Trizivir therapy. A second therapeutic product, Zeffix, an oral treatment for chronic hepatitis B, is currently being introduced in key markets worldwide by GlaxoWellcome, BioChem's partner for the development and commercialisation of both 3TC/Epivir and Zeffix.
It is anticipated that Dr Francesco Bellini, the Honourable James A. Grant and Gerard Veilleux will join the board of the enlarged company in non- executive capacities with effect from Closing. Dr James Cavanaugh will remain as Chairman of the enlarged company and Mr Stahel, Mr Russell and Dr Totten will continue their capacities within the enlarged company as Chief Executive, Group Finance Director and Group R&D Director respectively.
BioChem Shareholders will be entitled to receive new Shire Shares or new Shire ADSs in exchange for their BioChem Shares, with an exchange ratio based on the average closing price of a Shire ADS during the last fifteen trading days ending on the third trading day prior to the Closing. BioChem Shareholders resident in Canada will be entitled to elect for Shire Exchangeco Shares instead of Shire Shares or Shire ADSs.
BioChem Shareholders will receive $37 worth of Shire Consideration Shares provided the average closing price of a Shire ADS during the last fifteen trading days ending on the third trading day prior to the Closing is between US$42.70 and US$70.80. If the Average Shire ADS price as determined above is greater than or equal to $70.80, the exchange ratio will be fixed at 0.5226 Shire ADSs for each BioChem Share. If the Average Shire ADS price as determined above is less than or equal to US$42.70, the exchange ratio will be fixed at 0.7839 Shire ADSs for each BioChem Share. If the Average Shire ADS price is US$51 9/16 (being the closing price on 8 December 2000) Shire Shareholders would be interested in approximately 53 per cent of the company going forward and BioChem Shareholders would be interested in approximately 47 per cent of the company going forward, assuming all existing BioChem Shareholders exchange their BioChem Shares for Shire Shares pursuant to the Merger and assuming the exercise of all options and warrants in respect of BioChem Shares. On the same basis, the pro forma market capitalisation of the company going forward would be US$8.5 billion ( pnds stlg 5.9 billion). A price of $37 represents a 39.6 per cent premium to the closing share price of BioChem on 8 December 2000.
The Merger, which is expected to close in the second quarter of 2001, is subject to the approval of Shire and BioChem Shareholders, the absence of any material change affecting BioChem, the accounting of the Merger as a pooling of interests, the obtaining of regulatory approvals and other customary terms and conditions (including admission of the new Shire Shares to be issued pursuant to the Merger to the Official List and to trading on the London Stock Exchange). Shire will continue to have its primary listing in London with additional listings on NASDAQ and the Exchangeco Shares will trade on Toronto Stock Exchange, subject to various approvals.
For the nine months ended 30 September 2000, the unaudited results for Shire and BioChem were as follows :
<<
Shire (US$m)(x) BioChem (US$m)(x) BioChem (C$m)(x)
Revenues 380.6 156.8 230.7
Net income (xx) 62.0 77.0 113.2
Net assets 681.1 433.4 637.1
Net cash 41.8 186.5 274.1
>>
(x) Shire reports its results under US GAAP and BioChem reports its
results under Canadian GAAP
(xx) Net income is stated prior to a APB 25 charge for Shire and prior to
net gains on sale of long term investments for BioChem |
