Shire Successfully Settles Former TKT Shareholder Appraisal Rights Litigation
PHILADELPHIA and DUBLIN, November 5 /PRNewswire-FirstCall/ -- Shire plc
(LSE: SHP, NASDAQ: SHPGY), the global specialty biopharmaceutical company,
announces that it has successfully settled all pending litigation in
connection with former dissenting shareholders of Transkaryotic Therapies,
Inc. (TKT). Shire will pay the same price of $37 per share originally offered
to all TKT shareholders at the time of the July 2005 merger, plus interest.
Background to the litigation
As previously disclosed, before completion of the merger, certain
dissenting shareholders holding approximately 11.3 million of TKT shares
submitted written demands for appraisal of the fair value of these shares
and, as a result, elected not to accept the $37 per share merger
consideration offered by Shire. A second lawsuit was brought in March 2007
alleging, among other claims, breaches of fiduciary duty by certain members
of TKT's Board. The majority of that second lawsuit had been dismissed by the
Court at summary judgment in June 2008. A trial date had been set for both
cases on December 10th, 2008.
Details of the Settlement
Shire will pay $37 per share - the same amount per share paid to
non-dissenting shareholders in July 2005 at the time of the merger between
Shire and TKT - plus interest. The Delaware Chancery Court has approved
dismissal of the case and Shire expects to make payment to the dissenting
shareholders on November 7, 2008.
The settlement represents a total payment of $567.5 million, representing
consideration at $37 per share of $419.9 million and an interest cost of
$147.6m. Although not controlling for this case, under current law, the court
presumptively awards interest in appraisal rights cases at a statutorily
determined interest rate that is 5 percentage points above the Federal
Reserve discount rate (as it varies over the duration of the case). The
interest cost for today's settlement uses an interest rate that approximates
this statutory rate. This interest rate has been applied on a compound basis
to the $419.9 million of consideration for the duration of the time from the
merger to the payment of funds. As expected, the total payment of $567.5
million will be met from Shire's existing cash resources and available
facilities.
Since the time of the merger and as recorded in Shire's Q3 balance sheet
published in its October 28th earnings release, Shire has provided for a
potential liability in connection with this litigation, of $419.9 million
plus interest of $74.6 million up to September 30, 2008. The additional
interest of $73 million, less applicable taxes, will be excluded from Shire's
Non GAAP earnings.
Angus Russell, Shire Chief Executive Officer stated: "We are very pleased
to have reached this settlement on terms that confirm that Shire paid a full
and fair price for TKT in July 2005 at $37 per share."
Notes to editors
SHIRE PLC
Shire's strategic goal is to become the leading specialty
biopharmaceutical company that focuses on meeting the needs of the specialist
physician. Shire focuses its business on attention deficit hyperactivity
disorder (ADHD), human genetic therapies (HGT) and gastrointestinal (GI)
diseases as well as opportunities in other therapeutic areas to the extent
they arise through acquisitions. Shire's in-licensing, merger and acquisition
efforts are focused on products in specialist markets with strong
intellectual property protection and global rights. Shire believes that a
carefully selected and balanced portfolio of products with strategically
aligned and relatively small-scale sales forces will deliver strong results.
For further information on Shire, please visit the Company's website:
http://www.shire.com.
"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM
ACT OF 1995
Statements included herein that are not historical facts are
forward-looking statements. Such forward-looking statements involve a number
of risks and uncertainties and are subject to change at any time. In the
event such risks or uncertainties materialize, the Company's results could be
materially affected. The risks and uncertainties include, but are not limited
to, risks associated with: the inherent uncertainty of pharmaceutical
research, product development, manufacturing and commercialization including,
but not limited to, the establishment in the market of VYVANSE(R)
(lisdexamfetamine dimesylate) (Attention Deficit and Hyperactivity Disorder
("ADHD")); the impact of competitive products, including, but not limited to,
the impact of those on the Company's ADHD franchise; patents, including but
not limited to, legal challenges relating to the Company's ADHD franchise;
government regulation and approval, including but not limited to the expected
product approval date of INTUNIV(TM) (guanfacine extended release) (ADHD);
the Company's ability to secure new products for commercialization and/or
development; the Company's ability to successfully integrate its stake in
Jerini AG, as well as realize the anticipated benefits of the acquisition;
and other risks and uncertainties detailed from time to time in the Company's
filings with the Securities and Exchange Commission, including the Company's
Annual Report on Form 10-K for the year ended December 31, 2007.
