Full Press Release Details
Corporate Governance Expert Supports Alcon Independent Director Committee's
Position against Novartis
HUENENBERG, Switzerland - June 28, 2010
- The Alcon Independent Director Committee (the "IDC") announced today
that Professor Hans Caspar von der Crone, a leading Swiss legal and corporate
governance expert, has concluded that a recommendation by the IDC is an
indispensable first step before the board of Alcon, Inc. ("Alcon") can decide on
the merger proposal of Novartis AG ("Novartis"). This conclusion refutes
Novartis' public implications that it would be able to unilaterally impose the
merger irrespective of the IDC's position once Novartis becomes Alcon's majority
copy of the legal opinion is available on the IDC's website:
legal opinion, Professor von der Crone confirmed the IDC's rights and
obligations under Swiss law and, in doing so, supported many of the legal
arguments previously put forth by the IDC. In concluding that "the Alcon board
will not be able to validly decide on Novartis' merger proposal without the
IDC's prior recommendation of that proposal," Professor von der Crone reasoned
commissioned Professor von der Crone, as an independent third party and expert
in Swiss corporate law and corporate governance best practices, to review all
relevant corporate documents and issue a legal opinion as to the internal
approval process that must be followed by Alcon in connection with Novartis'
merger proposal. Hans Caspar von der Crone is a Professor for Private,
Commercial and Corporate Law at the University of Zurich (Ordinarius). He
graduated from the University of Zurich and from Yale Law School. Professor von
der Crone was Chairman of the Swiss Takeover Board from 1999 through October
2005 and before that he was a member of the Commission of Regulation of the
Swiss Stock Exchange, the supervisory body that preceded the Swiss Takeover
Board. He is also a member of several boards and professional organizations and
a successfully practicing attorney in particular in the fields of Corporate and
Commercial Law, Capital Market and Securities Law.
Plaskett, Chairman of the IDC, said, "Since the beginning of this process, the
IDC has asserted that all roads lead to the independent directors. While we
continue to hope that we can reach a negotiated deal, Professor von der Crone's
legal opinion makes clear that, regardless of Novartis' ultimate course of
action, the IDC's recommendation is a mandatory step prior to the consummation
of Novartis' merger proposal. The independent directors have a duty to protect
the rights of Alcon and its minority shareholders, and we are committed to
taking all available and appropriate actions to do so."
Plaskett added, "Further, any action that Novartis might take for the purpose of
circumventing the minority protections embodied in the current IDC would result
in the same conflict of interests as taking the prohibited actions
on the work conducted by the IDC (including the IDC's comments on RiskMetrics'
analysis) has been published on the IDC's website: www.transactioninfo.com/alcon
(see in particular the IDC's press releases dated January 20 and February
of Novartis' proposal, which was deemed grossly inadequate by the IDC and its
advisors, has steadily deteriorated since it was first announced. As of June 25,
2010, the Novartis proposal of 2.8 Novartis shares for each Alcon share is
valued at $136.78 per Alcon share, highlighting the inferiority of the
consideration offered to the minority shareholders relative to the cash that
Nestl S.A. is receiving. The current value of Novartis' merger proposal
represents an approximately 25% discount to the $181.71 in cash (including
interest to be paid to Nestl S.A., computed through the end of August 2010)
that Novartis has agreed to pay Nestl S.A. for their 52% control stake in
Alcon. It also represents a 17% and 15% discount to Alcon's closing prices one
day and one month before the proposal was announced, respectively. Meanwhile,
Alcon's performance remains strong, having exceeded analyst estimates in each of
the past two quarters that it has reported since the merger proposal was first
& Co., Sullivan & Cromwell LLP and Pestalozzi, Zurich, are continuing to
act as financial and legal advisors to the IDC.
Group (212) 333-3810
Inc. is the world's leading eye care company, with sales of approximately $6.5
billion in 2009. Alcon, which has been dedicated to the ophthalmic industry for
65 years, researches, develops, manufactures and markets pharmaceuticals,
surgical equipment and devices, contacts lens solutions and other vision care
products that treat diseases, disorders and other conditions of the eye. Alcon
operates in 75 countries and sells products in 180 markets. For more information
on Alcon, Inc., visit the Company's website at www.alcon.com.
Caution Concerning Forward-Looking
Statements. This press release may contain forward-looking statements
within the meaning of the United States Private Securities Litigation Reform Act
of 1995. Any forward-looking statements reflect the views of the IDC as of the
date of this press release with respect to future events and are based on
assumptions and subject to risks and uncertainties. Given these uncertainties,
you should not place undue reliance on these forward-looking statements. There
can be no guarantee that Novartis or Alcon will achieve any particular future
financial results or future growth rates or that Novartis or Alcon will be able
to realize any potential synergies, strategic benefits or opportunities as a
result of the consummation of the Novartis purchase or the proposed merger.
Also, there can be no guarantee that the IDC will obtain any particular result.
Except to the extent required under the federal securities laws and the rules
and regulations promulgated by the Securities and Exchange Commission, we
undertake no obligation to publicly update or revise any of these
forward-looking statements, whether to reflect new information or future events
or circumstances or otherwise.