MONTREAL, QUEBEC -- (Marketwired) -- 07/02/13 -- Thallion Pharmaceuticals Inc. (TSX VENTURE: TLN) ("Thallion") announced today that the Superior Court of Quebec has issued an interim order authorizing Thallion to hold an annual and special meeting of the shareholders of Thallion, at which shareholders will be asked to approve the proposed plan of arrangement (the "Arrangement") involving the acquisition of Thallion by BELLUS Health Inc. ("BELLUS Health") (TSX: BLU), which was announced previously on June 18, 2013.
The meeting of shareholders will be held at the offices of McCarthy Tetrault LLP, Suite 2500, 1000, De La Gauchetiere Street West, Montreal, Quebec, H3B 0A2 at 10:00 a.m. (ET) on August 6, 2013. The Court has fixed July 4, 2013 as the record date for determining the shareholders entitled to receive notice of and to vote at the meeting.
The acquisition agreement between BELLUS Health and Thallion (which can be found at www.sedar.com) provides for a cash consideration of approximately $6.332 million ($0.1765 per common share (on a fully-diluted basis)), subject to adjustments, and (ii) the issuance of one contingent value right ("CVR") per common share, entitling the holder thereof to: (A) its pro rata share of 80% of any additional purchase price consideration to be received from Premium Brands Holding Corp. ("Premium Brands") in 2016 (expected to be up to approximately $1.45 million) (or $0.0323 per CVR), and (B) its pro rata share of 5% of the Shigamabs® revenue generated or received by BELLUS Health, capped at $6.5 million (or $0.1812 per CVR), payable in installments upon the achievement by BELLUS Health of each whole $10 million tranche of revenue on Shigamabs®.
Completion of the Arrangement is subject to receipt of court and regulatory approvals and other third party consents. The acquisition agreement also contains closing conditions, including that Thallion have net cash on hand, as determined pursuant to the terms of the acquisition agreement ("Net Cash"), of at least $7,500,000, on the effective date (including deemed proceeds for the exercise or cancellation as per the Arrangement of "in-the-money" options of approximately $500,000), that no more than 5% of Thallion shareholders dissent to the Arrangement and other customary closing conditions. The acquisition agreement also provides that if the Net Cash condition is not met, BELLUS Health will have the option of either terminating the acquisition agreement or reducing the cash portion of the consideration payable under the Arrangement in proportion to any shortfall on a dollar-for-dollar basis, pro rata to each Thallion share, rounded to the nearest hundredth of a cent. If Thallion's Net Cash at the effective date is estimated to be in excess of $7,500,000, the cash portion of the consideration payable under the Arrangement will instead be increased in proportion to such excess amount on a dollar-for-dollar basis, pro rata to each Thallion share, rounded to the nearest hundredth of a cent.
Response to Jaguar
Thallion is concerned that Jaguar continues to issue press releases that appear to contain misstatements of fact, misrepresentations and/or false assumptions which may mislead investors and Thallion's shareholders regarding the merits of the Arrangement versus other available alternatives including a liquidation. The management information circular of Thallion (the "Circular") which will contain all relevant information relating to the Arrangement, including additional information regarding a liquidation scenario, as well as the related proxy form and letter of transmittal, are expected to be mailed to the shareholders of Thallion on or about July 10, 2013. Furthermore, Jaguar statements and actions, including in connection with the Court proceedings, also increase Thallion's legal and other advisory costs that impact the available Net Cash to the detriment of shareholders.
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