- Additional Proxy Soliciting Materials - Non-Management (definitive) (DFAN14A)
April 21 2011 - 4:36PM
Edgar (US Regulatory)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Consent Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant
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Filed by a Party other than the Registrant
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Check the appropriate box:
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Preliminary Consent Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Consent Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to Section 240.14a-12
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CEPHALON, INC.
(Name of Registrant as Specified in Its Charter)
VALEANT PHARMACEUTICALS INTERNATIONAL, INC.
(Name of Person(s) Filing Consent Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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Title of each class of securities to which transaction applies:
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Aggregate number of securities to which transaction applies:
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Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and
state how it was determined):
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Proposed maximum aggregate value of transaction:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
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Form, Schedule or Registration Statement No.:
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Filing Party:
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Date Filed:
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International
Headquarters
7150 Mississauga Road
Mississauga, Ontario L5N 8M5
Phone: 905.286.3000
Fax: 905.286.3050
April 21, 2011
To our fellow Cephalon Stockholders,
Valeant recently announced an all-cash offer to acquire Cephalon
for at least $73 per share.
This price represents a 29%
premium to Cephalons
30-day
trading average on the day we announced our offer, and
we are
prepared to increase it modestly
, if we are permitted to
conduct due diligence and the results of such due diligence
demonstrate greater value than is supported by Cephalons
public filings.
YOU, THE
STOCKHOLDERS, SHOULD HAVE THE RIGHT TO CHOOSE
BETWEEN OUR CASH OFFER OF AT LEAST $73 AND AN UNCERTAIN
FUTURE
Unfortunately, Cephalons Board is unwilling to engage with
us and has rejected our offer in favor of an uncertain
standalone strategy. They are pursuing this strategy even though:
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Cephalon had an average share price of $57 for the month prior
to Valeants offer and the median Wall Street analyst
future price target was then only $60
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Cephalons share price has declined
over the past
five years;
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Third parties believe that Cephalon is facing even tougher
times ahead
Recent Wall Street analyst (IBES)
median estimates project a 42% decline in earnings per share
from 2011 to 2013;
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68% of Wall Street analysts gave Cephalon a Sell
or Hold rating
prior to Valeants offer;
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Cephalon has, in large part, based its future on developing
novel drugs even though
it has not successfully developed a
major novel product since 1998
and despite multiple recent
pipeline failures;
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Since Valeants offer,
analysts have come out in support
of the transaction
, describing our offer as an
attractive exit (Oppenheimer & Co Inc.,
March 30, 2011), fair (Stifel Nicolaus,
March 31, 2011), and an immediate and unmatched
premium (Lazard Capital Markets, April 5, 2011);
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If we are not permitted to conduct due diligence,
Cephalon
stockholders will lose the potential opportunity to have us
modestly increase our offer
; and
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If a transaction is not completed,
the Cephalon share price
would likely be significantly adversely affected.
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CEPHALONS
BOARD REFUSES TO LET YOU CHOOSE
Valeant would still prefer to conduct due diligence and
negotiate a friendly transaction with Cephalon, but the current
Cephalon Board has rejected our attempts. In addition, Cephalon
has structural impediments that prevent the consummation of our
offer, including a poison pill that was put in place
without stockholder approval. The Cephalon Board could eliminate
these impediments, but has thus far been unwilling to do so.
1
WE EXPECT
OUR NOMINEES TO MAXIMIZE VALUE FOR CEPHALON
STOCKHOLDERS
We have begun a consent solicitation process to request that
Cephalon stockholders take action to replace the current
Cephalon Board with the eight highly-qualified and
well-respected professionals we have nominated for election to
the Cephalon Board. We believe our nominees have the right
experience, skills and qualifications to effectively maximize
value for, and properly represent, the interests of
Cephalons stockholders and will be committed to exploring
all of the options to maximize value, consistent with their
fiduciary responsibilities. Those options will potentially
include:
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Providing access to due diligence to, and negotiating with, us
with a view to achieving a higher offer;
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Conducting an efficient auction process while our offer is open;
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Negotiating a merger agreement with us, which could include a
go-shop provision so as to allow Cephalons
Board to determine if there is a bidder willing to pay a higher
price.
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We expect the nominees to fully discharge their fiduciary
obligations and, if the nominees elected constitute a majority
of Cephalons Board, we would be willing to keep our offer
open for a reasonable period of time while the new Cephalon
Board explores Cephalons options.
COMPLETE
AND RETURN THE GOLD CONSENT CARD BEFORE MAY 12
THIS IS YOUR CHANCE TO RECEIVE AT LEAST $73 PER SHARE IN CASH.
If you want the opportunity to accept our offer, we urge you to
complete, sign, date and return the GOLD card today. If we do
not receive consents from holders of greater than 50% of the
outstanding shares of common stock by May 12, 2011, we
intend to withdraw our offer and pursue other opportunities.
Sincerely,
J. Michael Pearson
Chairman and Chief Executive Officer
Valeant Pharmaceuticals International, Inc.
* * *
2
Forward-looking
Statements
Certain statements made in this communication may constitute
forward-looking statements of Valeant, including, but not
limited to, statements regarding our offer to purchase Cephalon,
financing related to the proposed transaction, our consent
solicitation process or our intention to commence a tender
offer, our opportunities and our plans should we acquire
Cephalon, the effect of the proposed transaction on financial
results, and certain financial projections. Forward-looking
statements may be identified by the use of the words
anticipates, expects,
intends, plans, should,
could, would, may,
will, believes, estimates,
potential, or continue and variations or
similar expressions. These statements are based upon the current
expectations and beliefs of management of Valeant and are
subject to certain risks and uncertainties that could cause
actual results to differ materially from those described in the
forward-looking statements. These risks and uncertainties
include, but are not limited to, risks and uncertainties
discussed in Valeants most recent annual or quarterly
report filed with the Securities and Exchange Commission
(SEC) and Canadian Securities Administrators
(CSA) and other risks and uncertainties as discussed
from time to time in Valeants filings with the SEC and the
CSA, which disclosures are incorporated herein by reference.
Readers are cautioned not to place undue reliance on any of
these forward-looking statements. Valeant undertakes no
obligation to update any of these forward-looking statements to
reflect events or circumstances after the date of this
communication or to reflect actual outcomes except as required
by securities laws. You are advised, however, to consult any
further disclosures we make on related subjects in our filings
with the SEC and the CSA.
Certain
Information Concerning Participants In Solicitation; Additional
Information and Where to Find It
This communication may be deemed to be solicitation material in
respect of the proposed removal of directors from, and election
of directors to, the Board of Directors of Cephalon, as well as
the repeal of any changes to Cephalons Bylaws. This
communication accompanies a copy of the definitive consent
solicitation statement filed by Valeant with the SEC on the date
hereof. THAT DOCUMENT SETS FORTH THE IDENTITY OF THE
PARTICIPANTS IN THE SOLICITATION AND A DESCRIPTION OF THEIR
DIRECT OR INDIRECT INTERESTS, BY SECURITY HOLDINGS, OR
OTHERWISE, AND IS ALSO AVAILABLE AT THE WEB SITE MAINTAINED BY
THE SEC AT WWW.SEC.GOV. OR FROM VALEANTS WEBSITE AT
WWW.VALEANT.COM UNDER THE TAB INVESTOR RELATIONS AND
THEN UNDER THE HEADING SEC FILINGS, OR , FOR FREE,
BY DIRECTING A REQUEST TO VALEANT, 7545 IRVINE CENTER DRIVE,
IRVINE, CALIFORNIA, 92618, ATTENTION: CORPORATE SECRETARY. It
includes the form of gold consent card to be completed and
delivered by each Cephalon stockholder that desires to provide
written consent in connection with the consent solicitation.
This communication does not constitute an offer to buy or
solicitation of an offer to sell any securities. No tender offer
for the shares of Cephalon has commenced at this time. In
connection with any tender offer and its consent solicitation,
Valeant will file relevant materials, which may include a tender
offer statement
and/or
other
documents, with the SEC. ALL INVESTORS AND SECURITY HOLDERS OF
CEPHALON ARE URGED TO READ ANY SUCH DOCUMENTS FILED WITH THE SEC
BY VALEANT CAREFULLY AND IN THEIR ENTIRETY, BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION. Investors and security holders
will be able to obtain free copies of documents filed with the
SEC by Valeant (when they become available) in the same manner
as set forth above with respect to the definitive consent
solicitation statement.
3
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