OrbiMed Advisors LLC (“OrbiMed”) today announced that Glass Lewis & Co., a
leading provider of corporate governance services to institutional
shareholders, has recommended that shareholders of 3SBio SSRX vote
AGAINST the company's going-private acquisition by a consortium of buyers that
includes the company's Chairman and CEO and other senior executives.
In its report, Glass Lewis stated, “We're ultimately uncomfortable with
management's influence on the proposed transaction and the board's handling of
these matters given the unique circumstances of the Company and the value
offered to unaffiliated shareholders in the proposed buyout.”
The report specifically criticizes management's handling of a third-party
offer for 3SBio at a value significantly higher than the agreed upon buyout
price: “Were it not for the CFO's and management's stiff-arming of Party A, we
believe the Company likely could have sold itself for a higher price than
presently offered to shareholders.”
Glass Lewis also concluded that the company's business prospects suggest a
higher buyout value: “Given the continued positive outlook of {3SBio},
consisting of projected double-digit revenue growth and healthy profit
margins, as well as some indications in the valuation analysis that the buyout
price may be on the low side, management's proposed offer appears insufficient
in our view.”
In response to the Glass Lewis report, OrbiMed said, “We concur with this
report's criticism of the flawed buyout process and management's inherent
conflicts, and as one of 3SBio's largest shareholders (9.5% of outstanding
ADSs), we intend to vote our shares against the transaction.”
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