On June 27, 2006, Barr announced that the Supervisory Board of PLIVA had endorsed Barr's initial proposal to make a tender offer to PLIVA's shareholders to purchase 100% of the shares of PLIVA for HRK 705 per share or approximately $2.2 billion in cash.
"As we stated when our initial offer was announced, we believe that Barr represents the best potential suitor for PLIVA and provides significant value to PLIVA's shareholders," said Bruce L. Downey, Barr's Chairman and Chief Executive Officer. "First, we have access to the necessary capital to successfully complete this transaction and we remain committed to that purpose. In addition, Barr offers a number of other strengths that differentiate us from other potential acquirers, including: the complementary nature of our two businesses; the limited overlap in products and markets; our commitment to maintain investment in PLIVA facilities; and our plan to headquarter our European operations in Croatia."
"We also believe that our offer is strengthened by the opportunity created by combining Barr's expertise in the U.S. regulatory, legal and marketing environments with PLIVA's biogeneric capabilities, resulting in the development of biogeneric products for European and U.S. markets. Our offer would combine two industry leading R&D groups, resulting in faster product development across several technology platforms including solid dosage forms, extended/delayed release tablets, orally disintegrating tablets, creams/ointments, injectables, biopharmaceuticals and API capabilities. Finally, we offer the best opportunity for utilizing the skills and expertise of PLIVA management and employees. We are confident that our offer, as well as our commitment to maximize PLIVA's capabilities and its facilities, represents the best business option for PLIVA's employees, the people of Croatia, and investors and shareholders in PLIVA."
Downey continued, "We would like to remind shareholders that all bidders for PLIVA, including Barr and Actavis Group, must receive Hart-Scott-Rodino clearance in the United States prior to completing a tender offer for PLIVA. We anticipate receiving such clearance in the near term and would move forward with the tender offer process once clearance is received or sooner. With expeditious clearance, the only condition to our tender will be acceptances that result in Barr holding more than 50% of PLIVA's shares. We expect to make our U.S. Federal Trade Commission filing by July 5, 2006."
The Company also noted that it is constrained from making private purchases of PLIVA shares because of U.S. antitrust regulations. Barr would encourage all shareholders of PLIVA not to sell their shares to any potential acquirer, but rather to allow the public tender process to run its course. This would permit PLIVA's Supervisory Board and Management Board adequate time to evaluate all acquisition proposals and make a recommendation to its shareholders, giving all shareholders of PLIVA the opportunity to receive an equal and fair price.
Financial Impact
The transaction is expected to be neutral to slightly accretive to the Company's internal fiscal 2007 earnings estimates and accretive to the Company's internal fiscal 2008 earnings estimates, excluding synergies and cost savings, charges associated with the transaction and the impact of amortization of intangible assets related to this transaction. The Company expects the combination to generate short-term cost savings and provide long- term cost benefits reflecting improved manufacturing efficiencies, lower manufacturing costs, lower product development costs and tax savings. Net pre- tax cost savings are estimated to be approximately $50 million in fiscal 2008 and growing to in excess of $100 million by fiscal 2009. In addition, long- term synergies and cost savings per year are projected to continue to increase as the Company further utilizes the expanded capabilities of the combined organization.
The Company intends to finance the transaction and related costs with a portion of Barr's cash reserves, and new debt of approximately $2 billion under long-term and short-term facilities. As of March 31, 2006, the Company had over $600 million in cash and marketable securities and approximately $15 million of debt outstanding.
About PLIVA d.d.
PLIVA, established in 1921, is a global generic pharmaceutical company with operations in more than 30 countries worldwide. It is the leading pharmaceutical company based in Central and Eastern Europe (CEE) and has been listed on the Zagreb and London Stock Exchanges since 1996. PLIVA specializes in the development, production and distribution of generic pharmaceutical products, including biologicals, cytostatics, and other value-added generics, as well as active pharmaceutical ingredients.
About Barr Pharmaceuticals, Inc.
Barr Pharmaceuticals, Inc., a holding company that operates through its principal subsidiaries, Barr Laboratories, Inc. and Duramed Pharmaceuticals, Inc., is engaged in the development, manufacture and marketing of generic and proprietary pharmaceuticals.
This announcement does not constitute an offer to sell or invitation to purchase any securities or the solicitation of any vote for approval in any jurisdiction, nor shall there be any sale, issue or transfer of the securities referred to in this announcement in any jurisdiction in contravention of applicable law.
Forward-Looking Statements
Except for the historical information contained herein, the statements made in this press release constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements can be identified by their use of words such as "expects," "plans," "projects," "will," "may," "anticipates," "believes," "should," "intends," "estimates" and other words of similar meaning. Because such statements inherently involve risks and uncertainties that cannot be predicted or quantified, actual results may differ materially from those expressed or implied by such forward-looking statements depending upon a number of factors affecting the Company's business. These factors include, among others: the difficulty in predicting the timing and outcome of legal proceedings, including patent-related matters such as patent challenge settlements and patent infringement cases; the outcome of litigation arising from challenging the validity or non- infringement of patents covering our products; the difficulty of predicting the timing of FDA approvals; court and FDA decisions on exclusivity periods; the ability of competitors to extend exclusivity periods for their products; our ability to complete product development activities in the timeframes and for the costs we expect; market and customer acceptance and demand for our pharmaceutical products; our dependence on revenues from significant customers; reimbursement policies of third party payors; our dependence on revenues from significant products; the use of estimates in the preparation of our financial statements; the impact of competitive products and pricing on products, including the launch of authorized generics; the ability to launch new products in the timeframes we expect; the availability of raw materials; the availability of any product we purchase and sell as a distributor; the regulatory environment; our exposure to product liability and other lawsuits and contingencies; the increasing cost of insurance and the availability of product liability insurance coverage; our timely and successful completion of strategic initiatives, including integrating companies and products we acquire and implementing our new enterprise resource planning system; fluctuations in operating results, including the effects on such results from spending for research and development, sales and marketing activities and patent challenge activities; the inherent uncertainty associated with financial projections; changes in generally accepted accounting principles; and other risks detailed from time-to-time in our filings with the Securities and Exchange Commission, including in our Annual Report on Form 10-K for the fiscal year ended June 30, 2005.
The forward-looking statements contained in this press release speak only as of the date the statement was made. The Company undertakes no obligation (nor does it intend) to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required under applicable law.
[EDITOR'S ADVISORY: Barr Pharmaceuticals, Inc. news releases are available free of charge through PR Newswire's News On-Call site at http://www.prnewswire.com/comp/089750.html. Barr news releases and corporate information are also available on Barr's website (www.barrlabs.com). For complete indications, warnings and contraindications, contact Barr's Drug Information Department at 1-800-Barr Lab. All trademarks referenced herein are the property of their respective owners.]
Source: Barr Pharmaceuticals, Inc.
