Glass Lewis Recommends 3SBio Shareholders Vote against Management Buyout Proposal
12 April 2013 - 4:30PM
Business Wire
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:NASDAQ) 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.”
About OrbiMed
OrbiMed Advisors LLC is a leading investment firm dedicated
exclusively to the healthcare sector, with approximately $7 billion
in assets under management. OrbiMed invests globally across the
spectrum of healthcare companies, from venture capital start-ups to
large multinational companies. OrbiMed’s team of over 60
professionals manages a series of private equity funds, hedge
funds, royalty funds and other investment vehicles.
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