Biotech Values

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Cephalon's Board of Directors Rejects Valeant Pharmaceuticals' Unsolicited Proposal

[I hope this one doesn't drag on forever like SNY-GENZ]

FRAZER, Pa., April 5, 2011 /PRNewswire/ -- Cephalon, Inc. (NASDAQ:CEPH - News) announced today that after a thorough review, its Board of Directors has formally rejected Valeant Pharmaceuticals International, Inc.'s March 29th unsolicited proposal to purchase the Company for $73 per share. In a letter to Valeant CEO J. Michael Pearson, the full text of which is included below, the Cephalon Board of Directors concluded, after an analysis by its financial and legal advisors, that Valeant's non-binding proposal is inadequate and not in the best interests of Cephalon's shareholders.

The following reasons, among others, support the Board's conclusion:


•The Valeant Non-Binding Proposal Does Not Fully Reflect Cephalon's Standalone Value. The Board determined that Valeant's proposed price significantly undervalues the Company, including the greater value obtainable from the Company's strategic plan, especially the value inherent in the Company's diversified and robust portfolio of marketed and pipeline products. The Board believes that the Valeant non-binding proposal is an opportunistic attempt by Valeant to shift this value to Valeant and its shareholders and away from the Company's shareholders.
•Valeant Values Cephalon Using "Worst-Case Scenario." By Valeant's own admission, its analysis of Cephalon's value is based on a worst-case scenario, which is an inappropriate methodology.
•Valeant's Timing is Opportunistic. The 30-day average Cephalon share price of $56.74 on which Valeant based their proposal is near the stock's 52-week low. Valeant's proposal represents virtually no premium to Cephalon's 52-week high.
•The Valeant Non-Binding Proposal Ascribes Little to No Value to Cephalon's Pipeline. Cephalon has created one of the broadest pipelines in the industry, with 10 late-stage product candidates targeted at novel and "best-in-class" therapeutics. This includes six indications with blockbuster potential which are projected to begin launching in the next three years. These programs represent tremendous value that is not reflected in Valeant's current proposal. Additionally, this proposal ignores the proven ability of the Cephalon Board and management to successfully identify, develop and commercialize pipeline opportunities.




Kevin Buchi, Cephalon's Chief Executive Officer, said "This is all about shareholder value. The Cephalon Board of Directors is committed to maximizing value for our shareholders, and we take this responsibility very seriously."

On March 30th, Valeant stated that it intended to commence a consent solicitation process during the week of April 4th to remove all of Cephalon's directors and replace them with Valeant's nominees. 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.

http://finance.yahoo.com/news/Cephalons-Board-of-Directors-prnews-668002884.html?x=0&.v=1