LAVAL, QUEBEC -- (Marketwired) -- 07/12/13 -- BELLUS Health Inc. (TSX: BLU) ("BELLUS Health") and Thallion Pharmaceuticals Inc. ("Thallion") (TSX VENTURE: TLN) announced today that they have entered into an amendment (the "Amendment") to the acquisition agreement dated June 17, 2013 pertaining to the proposed plan of arrangement (the "Arrangement") involving the acquisition of Thallion by BELLUS Health.
The Amendment provides for the potential of increased consideration for Thallion shareholders under the contingent value rights ("CVR") by:
-- increasing from 80% to 100% the pro rata share entitlement of a CVR holder for any additional purchase price consideration that may be received by Thallion, whether in cash, securities or property of any kind, from Premium Brands Holding Corp. expected in 2016 and representing up to a possible $0.0404 per CVR;-- removing the $10 million tranche threshold requirement thereby allowing a CVR holder to receive its pro rata share of 5% of any Shigamabs® revenue generated or received by BELLUS Health, including from any sale or other use of the Shigamabs® technology, capped at $6.5 million or $0.1812 per CVR;-- entitling a CVR holder to receive its pro rata share of 100% of any net proceeds generated from the licensing, selling or otherwise commercializing of (i) diagnostic products or services using certain Caprion Proteomics Inc. products, and (ii) all issued patents or pending patents pertaining to such Caprion Proteomics Inc. products, in respect of which Thallion has an ownership interest or monetary entitlement.-- providing that the CVRs may be transferred upon compliance with certain conditions and applicable securities legislation and requirements of regulatory authorities; and-- providing that BELLUS Health will apply to list the CVRs on the TSX. Listing will be subject to BELLUS Health fulfilling all the listing requirements of the TSX. There is no certainty that the CVRs will be listed.
The estimated combined $6.332 million cash and CVR consideration under the Arrangement (assuming that the maximum amount payable under the CVRs is achieved) now represents a premium of 206.2% to Thallion's closing trading price of $0.13 on the TSX Venture Exchange on June 17, 2013, being the last day prior to the announcement of the Arrangement, a premium of 214.5%, based on the volume weighted average trading price for the 20 prior trading days and a premium of 243.8%, based on the volume weighted average trading price for the 90 prior trading days.
Pursuant to the Amendment, the parties also agreed, for clarification purposes, to modify the definition of "Net Cash", to provide that in calculating the Net Cash, the amounts under (i) of the definition (i.e. the assets) shall include the deemed proceeds for the exercise or cancellation and treatment as per the Arrangement of "in-the-money" options of approximately $500,000, while the amounts under (ii) of the definition (i.e. the liabilities) shall exclude amounts paid or payable by Thallion for the cancellation of options or warrants and redemption of securities of Thallion as contemplated by the Arrangement (pursuant to Section 8.10 of the acquisition agreement). The parties further agreed that the Net Cash shall be calculated in a manner consistent with the calculations provided in Schedule F to the acquisition agreement which describe Thallion's estimate of Net Cash as at May 31, 2013, being approximately $8,200,000 to $8,400,000, including the deemed proceeds for the exercise or cancellation and treatment as per the plan of Arrangement of "in-the-money" options of approximately $500,000, and is provided for illustrative purposes only. As per the table set out on page 47 of Thallion's proxy circular dated July 4, 2013 relating to the annual and special meeting of shareholders (the "Circular") available on SEDAR at www.sedar.com, if the effective Net Cash on the effective date of the Arrangement is $8,000,000, the cash consideration per share payable on the effective date will be $0.1904 per share, representing, together with the consideration payable to optionholders under the plan of Arrangement, an aggregate consideration of approximately $6.332 million in addition to the CVRs.