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OrbiMed Advisors LLC (“OrbiMed”) today announced that Institutional
Shareholder Services (“ISS”), a leading provider of proxy research and
corporate governance services to institutional shareholders, has recommended
that shareholders of 3SBio
vote AGAINST the company's $15.40
per ADS going-private acquisition by a consortium of buyers that includes the
company's Chairman and CEO and other senior executives.
In its report, ISS casts doubt on management's reliance, in part, on its
financial advisor's earnings-based valuations because they were based on
earnings estimates provided by management that are considerably below Wall
Street consensus estimates. ISS said, “Shareholders should note that in its
analysis, Jefferies used the internal estimates provided by company
management, which, in this case, may be inherently motivated to downplay the
earnings projections.”
The report further questions management's commitment to a transaction with a
single private equity firm. ISS said, “Further, the exclusivity agreement
between Dr. Lou and CITIC PE may have limited the company's ability to attract
a better offer, and there is no compelling evidence that 3SBio cannot continue
to thrive as a stand-alone company.”
In response to this latest proxy voting recommendation, OrbiMed said, “Two
leading global proxy advisory firms, ISS and Glass, Lewis & Co., have now had
a chance to review the 3SBio going-private transaction and, not surprisingly,
when considering all the facts, they have reached the same conclusion as we
have, that a flawed buyout process and inherent conflicts have resulted in a
management-sponsored going-private transaction at an inadequate price that
does not serve the interest of all shareholders.” OrbiMed, a 9.4% holder of
3SBio shares, reiterated its intention to vote against the proposals at the
company's April 25 Extraordinary General Meeting.
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