SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 13E-3/A
Amendment No. 3
RULE 13E-3 TRANSACTION STATEMENT
(Pursuant to Section 13(e) of the Securities Exchange Act of 1934)
INTELLIGENT POLYMERS LIMITED
(Name of the Issuer)
BIOVAIL CORPORATION,
IPL ACQUIRECO 2000 LTD. (in formation)
and
IPL HOLDCO 2000 LTD. (in formation)
(Name of Person(s) Filing Statement)
COMMON STOCK, PAR VALUE $0.01
(Title of Class of Securities)
G48029105
(CUSIP Number of Class of Securities)
Kenneth C. Cancellara, Q.C.
2488 Dunwin Drive, Mississauga, Ontario, Canada L5L 1J9
(416) 285-6000
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications on Behalf of Person(s) Filing Statement)
This statement is filed in connection with (check the appropriate box):
(a) / / The filing of solicitation materials or an information statement
subject to Regulation 14A, Regulation 14C, or Rule 13e-3(c) under the
Securities Exchange Act of 1934.
(b) / / The filing of a registration statement under the Securities Act of
1933.
(c) / / A tender offer.
(d) /X/ None of the above.
Check the following box if the soliciting materials or information statement
referred to in checking box (a) are preliminary copies: / /
Check the following box if the filing is a final amendment reporting the results
of the transaction: / /
Calculation of Filing Fee
Transaction Valuation(1): $145,986,750 Amount of Filing Fee(2): $29,198
(1) For purposes of calculating the filing fee only. This calculation is based
upon the purchase price of $39.06 per share for all issued and outstanding
shares of Common Stock, par value $0.01, of Intelligent Polymers Limited to
be acquired pursuant to this transaction.
(2) The amount of the filing fee, calculated in accordance with Section 13 of
the Securities Exchange Act of 1934, as amended, equals 1/50th of one
percent of the aggregate value of cash to be paid by Biovail Corporation
for all the issued and outstanding shares of Common Stock, par value $0.01,
of Intelligent Polymers Limited. The filing fee was paid in connection with
the filing of the Schedule 13e-3 Transaction Statement filed with the
Securities and Exchange Commission on August 31, 2000.
Check box if any part of the fee is offset as provided by Rule 0-11(a)(2) and
identify the filing with which the offsetting fee was previously paid. Identify
the previous filing by registration statement number, or the Form or Schedule
and the date of its filing. / /
Amount Previously Paid: ______________ Filing Party: ______________
Form or Registration No.: ______________ Date Filed: ______________
<PAGE>
Introduction.
------------
This Amendment No. 3 to Schedule 13E-3 Transaction Statement (the
"Statement") relates to the potential exercise by IPL Acquireco 2000 Ltd., a
corporation in formation ("Acquireco"), of an option to purchase all issued and
outstanding shares of Common Stock, par value $0.01, of Intelligent Polymers
Limited, a Bermuda corporation ("Intelligent Polymers").
Biovail Corporation, an Ontario corporation ("Biovail"), through a wholly
owned subsidiary, will be the holder of certain shares of Acquireco. Biovail
may, in the future, exercise certain rights granted to it as a shareholder of
Acquireco to cause Acquireco to become a wholly owned subsidiary of Biovail.
In the event that Biovail and IPL Holdco 2000 Ltd., an Ontario corporation
in formation ("Holdco"), reach a mutually satisfactory agreement prior to the
closing of the transaction, Holdco would be the holder of all the voting common
shares of Acquireco. In the event that Biovail and Holdco do not reach a
mutually satisfactory agreement prior to the closing of the transaction, Biovail
will be the holder of all the voting common shares of Acquireco.
The filing of this Statement does not constitute exercise of the option
described above. Exercise of such option must be done pursuant to the Bye-laws
of Intelligent Polymers.
The Statement is being filed on behalf of Biovail, Acquireco and Holdco.
Notwithstanding this Statement, Biovail, Acquireco and Holdco do not believe
that the transaction reported herein (the "Transaction") is subject to Rule
13e-3 under the Securities Exchange Act of 1934, as amended.
Item 1. Summary Term Sheet
o A Schedule 13e-3 Transaction Statement has been filed on behalf of
Biovail, Acquireco and Holdco with the Securities and Exchange
Commission which relates to the potential exercise by Acquireco of an
option to purchase all the Common Stock of Intelligent Polymers. The
Bye-Laws of Intelligent Polymers provide that the holder of a majority
of the Special Shares of Intelligent Polymers has an option to
purchase all the issued and outstanding Common Stock. Biovail is the
holder of all of the Special Shares of Intelligent Polymers and
proposes to transfer them to Acquireco. See "Background and Summary of
Transaction -- Identification of Biovail."
o Acquireco would pay $39.06 per share of Intelligent Polymers Common
Stock. See "Background and Summary of Transaction--Terms of
Transaction."
o The transaction would close on September 29, 2000. See "Background and
Summary of Transaction--Terms of Transaction."
o Acquireco may exercise the option to purchase all the Common Stock of
Intelligent Polymers without seeking the prior approval of the
Intelligent Polymers
<PAGE>
shareholders. As such, shareholders are not being asked to vote to
approve this purchase. See "Special Factors -- Fairness of the
Transaction."
o The exercise of the Purchase Option would be a fully taxable
transaction to the Intelligent Polymers shareholders. See "Certain
Material U.S. Federal Income Tax Consequences."
o Following the purchase of the Intelligent Polymers Common Stock,
Intelligent Polymers Common Stock would be de-listed from the American
Stock Exchange and Intelligent Polymers would have its public
reporting obligations suspended. See "Special Factors -- Purposes,
Alternatives, Reasons and Effects of the Transaction."
Item 2. Subject Company Information
(a) The issuer of the class of equity security which is the subject of this
filing and the address of its principal executive offices is:
Intelligent Polymers Limited
c/o Conyers Dill & Pearman
Clarendon House
2 Church Street
Hamilton HM 11, Bermuda
(b) The exact title of the class of security which is the subject of this
filing is Common Stock, par value $0.01, of Intelligent Polymers Limited
(the "Common Shares"). The number of Common Shares outstanding as of August
30, 2000, the most recent practicable date, is 3,737,500. The approximate
number of holders of the Common Shares as of August 1, 2000, the most
recent practicable date, is 521.
(c) Until September 30, 1999 (the "Separation Date"), the Common Shares were
part of a Unit (the "Units") consisting of one Common Share and one warrant
to purchase common shares of Biovail. The Units were traded on the American
Stock Exchange (the "AMEX") under the symbol IXP.u. On the Separation Date,
the Units separated into the two underlying securities. The Intelligent
Polymers Common Shares now trade on the AMEX under the symbol IXP, and the
Biovail Warrants now trade on the New York Stock Exchange under the symbol
BVFw. The following table sets forth the high and low prices on the AMEX
for the Units until the Separation Date and for the Common Shares after the
Separation Date, as reported by the AMEX.
On September 30, 1999 the closing price of the Units was $46.50.
<PAGE>
<TABLE>
<CAPTION>
High Low
Units
Fiscal 1998:
<S> <C> <C> <C>
2nd Quarter........................................ $22.18 $17.75
3rd Quarter........................................ 31.38 20.75
4th Quarter........................................ 30.38 19.75
Fiscal 1999:
-----------
1st Quarter........................................ 23.13 16.63
2nd Quarter........................................ 28.00 16.50
3rd Quarter........................................ 30.88 25.63
4th Quarter........................................ 41.88 28.00
Fiscal 2000:
-----------
1st Quarter........................................ 53.13 42.25
Common Shares
2nd Quarter (1).................................... 33.50 30.00
3rd Quarter........................................ 34.625 31.50
4th Quarter........................................ 37.50 34.00
</TABLE>
(1) The Units separated in 2nd Quarter Fiscal 2000.
On September 18, 2000 the Common Shares closed at $38.63.
(d) Intelligent Polymers has not paid any dividends on the Common Shares in the
past two years.
Pursuant to Section 3.9(E) of the Bye-Laws of Intelligent Polymers (the
"Bye-Laws"), until the expiration date of the Purchase Option (as defined
below), no resolution or act of Intelligent Polymers to authorize or permit
the declaration or payment of dividends or the making of another
distribution to shareholders will be effective without the prior written
approval of the holders of a majority of the Special Shares (as defined
below).
(e) Not applicable.
(f) Not applicable.
Item 3. Identity and Background of Filing Person
(a) This filing is being made on behalf of Biovail, Acquireco and Holdco.
<PAGE>
Biovail's business address and telephone number are:
Biovail Corporation
2488 Dunwin Drive
Mississauga, Ontario
Canada L5L 1J9
(415) 285-6000
In October 1997, Intelligent Polymers issued special shares, par value
$1.00 per share ("Special Shares"). Pursuant to the Bye-Laws, the Special
Shares confer on the holder of a majority of the Special Shares (the
"Special Shareholder") certain limited rights, including the right to
purchase all, but not less than all, of the outstanding Common Shares of
Intelligent Polymers at the time such right is exercised (the "Purchase
Option"). The Special Shares do not entitle the Special Shareholder to vote
at any meeting of holders of Common Shares ("Shareholders") and do not
entitle the Special Shareholder to receive any dividend or any other
distribution, or any right or interest in the profits or assets of
Intelligent Polymers.
Pursuant to the Bye-Laws, until the expiration of the Purchase Option, no
resolution or act of Intelligent Polymers to authorize or permit any of the
following will be effective without the prior written approval of the
holder of the majority of the Special Shares: (i) the allotment or issue of
shares or other securities of Intelligent Polymers or the creation of any
right to such allotment or issue; (ii) the reduction of Intelligent
Polymers' authorized share capital; (iii) outstanding borrowings by
Intelligent Polymers in excess of an aggregate of $1.0 million; (iv) the
sale or other disposition of, or the creation of any lien or liens on, the
whole or a part of Intelligent Polymers' undertaking or assets; (v) the
declaration or payment of dividends or the making of any other
distributions to shareholders; (vi) the amalgamation of Intelligent
Polymers; and (vii) any alteration of the Purchase Option. Biovail, as the
holder of a majority of the outstanding Special Shares, could preclude the
holders of a majority of the outstanding Common Shares and the Board of
Directors of Intelligent Polymers from taking any of the forgoing actions
during such period.
The terms of the Purchase Option are set forth in the Bye-Laws. Pursuant to
the Bye-Laws, the Special Shareholder may at any time exercise the Purchase
Option by giving an Exercise Notice to the Board of Directors of
Intelligent Polymers stating the Special Shareholder's intention of
acquiring all of the Common Shares for the time being in issue; the
Exercise Notice may be given at any time up until September 30, 2002.
The Exercise Notice shall state
(i) the consideration (expressed as an amount in cash in Dollars to
be given for each Common Share), which shall be as follows:
<PAGE>
If the Common Shares are acquired pursuant
to the Purchase Option
Purchase Option: Exercise Price
---------------------------- --------------
Before October 1, 2000 US $ 39.06
On or after October 1, 2000 and on or
before September 30, 2001 US $ 48.83
On or after October 1, 2001 and on or
before September 30, 2002 US $ 61.04
(ii) the form in which such consideration shall be discharged shall be
cash in Dollars save that, if securities of the Special
Shareholder are listed on a national securities exchange in the
United States of America or admitted to unlisted trading
privileges or listed on NASDAQ, it may be wholly or partially
satisfied in the securities of the Special Shareholder at the
election of the Special Shareholder;
(iii) to the extent that such consideration is in the form of the
securities of the Special Shareholder the amount expressed in
cash in Dollars represented thereby;
(iv) the name or names (if any) into which the Common Shares are to be
transferred; and
(v) the repurchase date.
Biovail has been the holder of all the issued and outstanding Special
Shares since October 1997. Biovail proposes to transfer the Special Shares
to Acquireco in consideration for Acquireco's issuance of non-voting common
shares of Acquireco to Biovail.
(b) Biovail is an international, fully-integrated pharmaceutical company that
specializes in the development, manufacture, marketing and licensing of
drugs utilizing advanced controlled-release, rapid dissolve, enhanced
absorption and taste masking technologies.
Holdco is a company in formation, the business of which would be to own the
common shares of Acquireco.
Acquireco is a company in formation, the business of which will be to
exercise the Purchase Option on September 29, 2000 and to hold the Common
Shares.
During the past five years none of Biovail, Holdco or Acquireco has been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors). During the past five years none of Biovail, Holdco or
Acquireco has been a party to any judicial or administrative proceeding
(except for matters that were dismissed without sanction or settlement)
that
<PAGE>
resulted in a judgment, decree or final order enjoining further violations
of, or prohibiting activities subject to, federal or state securities laws
or finding any violation of such laws.
(c) Information Regarding Biovail's Officers and Directors
Eugene N. Melnyk
Chelston Park Building 2
Colleymore Rock
St. Michael BH1
Barbados, West Indies
Mr. Melnyk has been the Chairman of the Board and a Director since March
29, 1994, the effective date of the amalgamation (the "Amalgamation") of
Biovail's predecessor entities, Biovail Corporation International ("BCI")
and Trimel Corporation ("Trimel"). Prior to that time, he had been the
Chairman of the Board of BCI since October 1991 and was instrumental in
acquiring, financing and organizing the companies or businesses that
comprised BCI. Mr. Melnyk also founded Trimel and served as its President
and Chief Executive Officer from 1983 through July 1991. Mr. Melnyk is
Chairman of the Board of Directors of Intelligent Polymers. Mr. Melnyk is a
citizen of Canada.
Bruce D. Brydon
2488 Dunwin Drive
Mississauga, Ontario
Canada, L5L 1J9
Mr. Brydon has been the Chief Executive Officer since November 1997. He
joined Biovail as the Chief Executive Officer and President in January 1995
and has been a Director since May 1995. Prior to that time and since 1990
he had been President, Managing Director and Chairman of the Board of the
Canadian Operations of Boehringer Mannheim. In the late 1980s, Mr. Brydon
served as President and CEO of Beiersdorf Canada. Mr. Brydon is a citizen
of Canada.
Robert A. Podruzny
2488 Dunwin Drive
Mississauga, Ontario
Canada, L5L 1J9
Mr. Podruzny has been the President and Chief Operating Officer since
November 1997. He joined Biovail as Vice President, Finance and Chief
Financial Officer in January 1996. Mr. Podruzny is a Director of Biovail.
He came to Biovail from Browning-Ferris Industries Ltd. where he served as
the Chief Financial Officer and as a Director of the Canadian operations
from 1993 to 1995. From 1987 to 1992, Mr. Podruzny served as General
Manager of the U.S. Health Promotion Division of MDS Health Group, a
Toronto-based medical services company. Mr. Podruzny is a citizen of
Canada.
<PAGE>
Kenneth C. Cancellara, Q.C.
2488 Dunwin Drive
Mississauga, Ontario
Canada, L5L 1J9
Mr. Cancellara joined Biovail as Senior Vice President and General Counsel
in March 1996, was appointed Secretary in April 1996, and has been a
Director since May 1995. Prior to that time, Mr. Cancellara was a partner
with the law firm of Cassels, Brock and Blackwell since 1980 where he held
many positions, including Chairman of the Executive Committee and managing
partner. Mr. Cancellara is a citizen of Canada.
Rolf K. Reininghaus
2488 Dunwin Drive
Mississauga, Ontario
Canada, L5L 1J9
Mr. Reininghaus has been a Senior Vice President and a Director since the
Amalgamation and has been President of Crystaal since November 1997. Prior
to that time, he had been the President, Chief Operating Officer and a
Director of BCI since October 1991 and Executive Vice President and a
Director of Trimel or its affiliates since November 1987. Prior to his
employment by Trimel, Mr. Reininghaus was the Marketing Manager of the
Canadian operations of Miles Pharmaceuticals, a division of Bayer AG. Mr.
Reininghaus is a citizen of Canada.
Brian H. Crombie
2488 Dunwin Drive
Mississauga, Ontario
Canada, L5L 1J9
Mr. Crombie joined Biovail as Senior Vice President, and Chief Financial
Officer in May 2000. Mr. Crombie came to Biovail from The Jim Pattison
Group, one of Canada's largest private holding companies where he served as
Managing Director Corporate Finance from 1998 to 2000 where he was
responsible for corporate development and treasury. Prior to that time, he
spent 7 years in finance and general management positions with The Molson
Companies most recently as SVP Corporate Finance and Treasurer responsible
for planning, accounting and control, corporate development, treasury and
investor relations. Mr. Crombie is a graduate of The Harvard School of
Business where he received his Masters in Business Administration. Mr.
Crombie is a citizen of Canada.
Kenneth S. Albert, Ph.D.
3701 Concorde Parkway
Chantilly, VA 20151
Dr. Albert joined Biovail as Vice President, Chief Scientific Officer in
January 1999. Dr. Albert came to Biovail from Schein Pharmaceutical Inc.,
where he had been the Vice
<PAGE>
President, Research and Development from 1995 to 1998. Prior to his tenure
at Schein, Dr. Albert was Corporate Director, Research and Development at
Forest from 1988 to 1995 and prior to that time he spent 14 years in senior
Research and Development positions at the Upjohn Company and Merck, Sharp
and Dohme. Dr. Albert is a citizen of the United States.
Wilfred G. Bistrow
467 Mountsberg Rd
RR#2
Campbellville, ONT
Canada, LOP IRO
Mr. Bristow has been a Director since the Amalgamation. Prior to that time,
he was a Director of BCI since January 1993. Mr. Bristow is and has been a
senior investment advisor at Nesbitt Burns Inc., a Canadian investment
banking firm, since December 1991. From September 1975 to December 1991, he
served as vice president and director of Richardson Greenshields of Canada,
an investment banking firm. Mr. Bristow is a citizen of Canada.
Paul W. Haddy
68 Durants
"Daydreams Christ Church" Building
Barbados, West Indies
Mr. Haddy was elected to the Board of Directors in June 2000. Mr. Haddy has
been Chairman and Chief Executive Officer of London Life Bank and Trust
Company since 1991. Mr. Haddy is a citizen of Canada.
Roger Rowan
53 Buckingham Avenue
Toronto, ONT
Canada M4N 1R3
Mr. Rowan was elected to the Board of Directors in June 1997. Mr. Rowan has
been President and Chief Operating Officer of Watt Charmichael Inc., a
private investment firm, since May 1994. Prior thereto, Mr. Rowan was the
Executive Vice President and Chief Operating Officer of Watt Charmichael
Inc. since 1991. Mr. Rowan is a citizen of Canada.
Robert Vujea
1030 Carpenter Ave.
Grand Rapids, Michigan 49504-3727
Mr. Vujea was elected to the Board of Directors in June 1997. Mr. Vujea has
been President of R & D Chemical Corporation, a chemical manufacturer and
distributor, since 1974. Prior thereto, Mr. Vujea has held senior
management positions within a number of companies including American
Greeting Card Corporation, Cole National Corporation and Diverco
Incorporated. Mr. Vujea is a citizen of the United States.
<PAGE>
During the past five years, none of the foregoing individuals has been
convicted in a criminal proceeding and has not been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction
which resulted in a judgment, decree, or final order enjoining further
violations of, or prohibiting activities, subject to, federal or state
securities laws or finding any violation of such laws.
Information Regarding Acquireco
Acquireco is a company in formation. In the event that Biovail and Holdco
reach a mutually satisfactory agreement prior to the closing of the
transaction, Holdco would be the holder of all the voting common shares of
Acquireco. In the event that Biovail and Holdco do not reach a mutually
satisfactory agreement prior to the closing of the transaction, Biovail
will be the holder of all the voting common shares of Acquireco.
Biovail has been the holder of all the issued and outstanding Special
Shares since October 1997. Biovail proposes to transfer the Special Shares
to Acquireco in consideration for Acquireco's issuance of non-voting common
shares of Acquireco to Biovail.
Information Regarding Holdco
Holdco will be a corporation incorporated under the laws of the Province of
Ontario to hold the voting common shares of Acquireco.
Andrew P. Gaspar will be the sole shareholder, director and officer of
Holdco. Mr. Gaspar is president of APG Consulting a private consulting
firm.
George Vesely, Joseph Shier, Thomas Higgins and 495414 Ontario Limited, an
Ontario corporation, owned by David Roffey (the "Investor Group") will
provide a loan to Holdco in the amount of US$6.5 million to enable Holdco
to acquire the common shares of Acquireco. The loan will secured by a
pledge of the shares of Acquireco and be guaranteed by Andrew Gaspar, the
sole shareholder of Holdco who will pledge the shares of Holdco to the
Investor Group as security for the guarantee. The loan will bear interest
at 14% per annum to December 31, 2000 and thereafter bears interest at 34%
per annum and will be repaid from the proceeds to be received by Holdco
from the purchase or redemption of the common shares of Acquireco.
David Roffey has served as President and Chief Executive Officer of Maple
Partners Financial Group Inc, Chairman of Maple Partners Bankhaus AG and
Chairman of Maple Trust Compnay since October 1997. From 1987 through 1997
Mr. Roffey served as Managing Partner, Derivitive Investment Group and
Director of First Marathon Inc. (Canada). He is a citizen of Canada.
George Vesely has served as Managing Partner, Private Client Services of
Maple Partners Financial Group Inc. since January 1999. Prior to 1999, Mr.
Vesely was a partner at Osler, Hoskin & Harcourt. Mr. Vesely is a citizen
of Canada.
<PAGE>
Joseph Shier has been Vice President of Maple Partners Financial Group Inc.
since August 1999. Prior to that, from August 1997 to August 1999 he was a
senior officer of a private investment company, M. Shier & Associates
Limited, and from January 1991 to 1999 was Chairman of Dor-Seal Inc. Mr.
Shier is a citizen of Canada
Thomas Higgins has served as Executive Vice President of Maple Partners
Financial Group Inc. since 1997. From 1989 through 1997 he served as Vice
President and Director, Derivative Instrument Group of First Marathon
Securities Limited. Mr. Higgins is a citizen of Canada.
The business address of the forgoing individuals is:
Maritime Life Tower Toronto Dominican Centre Suite 3500 PO Box 328 Toronto,
ONT, Canada M5K 1K7
During the past five years, none of the foregoing individuals has been
convicted in a criminal proceeding and has not been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction
which resulted in a judgment, decree, or final order enjoining further
violations of, or prohibiting activities, subject to, federal or state
securities laws or finding any violation of such laws.
Item 4. Terms of Transaction
(a) In order for Acquireco to purchase the Common Shares pursuant to the
Purchase Option prior to October 1, 2000, it must acquire the Special
Shares and the Purchase Option must be exercised by delivering an exercise
notice (the "Exercise Notice") to the Board of Directors of Intelligent
Polymers. The terms of the Purchase Option are set forth in the Bye-Laws.
Pursuant to the Bye-Laws, the Special Shareholder may at any time exercise
the Purchase Option by giving the Exercise Notice to the Board of Directors
of Intelligent Polymers stating the Special Shareholder's intention of
acquiring all of the Common Shares for the time being in issue; the
Exercise Notice may be given at any time up until September 30, 2002.
The Exercise Notice shall state
(i) the consideration (expressed as an amount in cash in Dollars to
be given for each Common Share), which shall be as follows:
If the Common Shares are acquired pursuant
to the Purchase Option
Purchase Option: Exercise Price
---------------------------- --------------
<PAGE>
Before October 1, 2000 US $ 39.06
On or after October 1, 2000 and on or before
September 30, 2001 US $ 48.83
On or after October 1, 2001 and on or before
September 30, 2002 US $ 61.04
(ii) the form in which such consideration shall be discharged shall be
cash in Dollars save that, if the securities of the Special
Shareholder, are listed on a national securities exchange in the
United States of America or admitted to unlisted trading
privileges or listed on NASDAQ, it may be wholly or partially
satisfied in securities of such other Special Shareholder at the
election of the Special Shareholder;
(iii) to the extent that such consideration is in the form of
securities of the Special Shareholder the amount expressed in
cash in Dollars represented thereby;
(iv) the name or names (if any) into which the Common Shares are to be
transferred; and
(v) the repurchase date.
Pursuant to the Bye-Laws, if the Common Shares are acquired for cash
pursuant to the Purchase Option before October 1, 2000, the cash purchase
price (the "Purchase Option Consideration") would be $39.06 per share. The
closing date of the purchase (the "Closing Date") would be September 29,
2000, and the Purchase Option Consideration of $39.06 per share would be
deposited with ChaseMellon Shareholder Services LLC, as payment agent (the
"Payment Agent"), on or prior to the Closing Date. Following the Closing
Date, and upon receipt of stock certificates for the Common Shares, as
instructed by the Payment Agent, the Payment Agent would distribute the
Purchase Option Consideration to each person or entity who was a holder of
the Common Shares at the close of business on the Closing Date.
The purpose of the Transaction would be to acquire Intelligent Polymers,
which would have certain products and product candidates developed or under
development pursuant to the Development Contract dated September 30, 1997
between Biovail and Intelligent Polymers.
Acquireco would exercise the Purchase Option prior to October 1, 2000 to
enable it to avoid a 25% increase in the Purchase Option price which occurs
after September 30, 2000. The Transaction would be structured to allow for
Acquireco to exercise the Purchase Option and hold the Common Shares of
Intelligent Polymers. Biovail would have certain rights granted to it as
the holder of the Acquireco Class A Shares and the non-voting common shares
to cause Acquireco to become wholly owned by Biovail. The Transaction would
be structured in this manner to defer Biovail's exercise of the Purchase
Option and give Acquireco or the
<PAGE>
holder of its voting common shares a profit for acquiring the Special
Shares and taking the risk that Biovail does not exercise its rights to
acquire Acquireco.
In the event that Holdco would be the holder of all the voting common
shares of Acquireco, Biovial would pay a fee to the Investor Group, and
reimburse the expenses of Holdco (the "Holdco Fee"). In the aggregate,
Biovail would pay $1.5 million pursuant to the Holdco Fee. Additionally,
Biovail would pay a $500,000 advisory fee to Maple Partners Financial Group
Inc. for its role as arranger of the Transaction.
In accordance with the terms of the Bye-Laws, Shareholders would not need
to take any steps to approve the purchase upon Acquireco's exercise of the
Purchase Option. Title to the Common Shares would automatically vest in
Acquireco on the Closing Date and the Purchase Option Consideration would
be paid to Shareholders, upon tender of the stock certificates directly or
through their brokers, in accordance with their respective interests.
Subsequent to the purchase of the Common Shares, Intelligent Polymers would
become a wholly-owned subsidiary of Acquireco. The Transaction would cause
each Shareholder to dispose of his or her Common Shares for the Purchase
Option Consideration.
It is expected that Acquireco will follow purchase accounting for the
Transaction.
The federal income tax consequences of the Transaction are discussed in
paragraph (d) of Item 7 of the Statement and such discussion is
incorporated herein by reference.
(b) Not Applicable
(c) The terms of the Transaction would be the same for all Shareholders.
(d) Appraisal rights would not be afforded under either applicable law or the
Bye-Laws to Shareholders in respect of the exercise of the Purchase Option
and none will be afforded by either Biovail, Acquireco, Holdco or
Intelligent Polymers. Each of Biovail, Acquireco and Holdco are unaware of
any rights available to objecting Shareholders under applicable law.
(e) None of Biovail, Acquireco or Holdco is aware, after making reasonable
inquiry of management of Intelligent Polymers, of any grant of access to
unaffiliated security holders to the corporate files of any of Biovail,
Acquireco Holdco or Intelligent Polymers or the appointment of counsel or
appraisal services for unaffiliated security holders at the expense of
either Biovail, Acquireco, Holdco or Intelligent Polymers.
(f) Not Applicable.
<PAGE>
Item 5. Past Contacts, Transactions, Negotiations and Agreements
(a) The nature and approximate amount in dollars of any transaction which has
occurred since the commencement of Intelligent Polymers' second full fiscal
year preceding the date of the Statement between Biovail and Intelligent
Polymers are as follows:
Since the commencement of Intelligent Polymers' second full fiscal year
preceding the date of the Statement, Intelligent Polymers paid
approximately $46.3 million to Biovail pursuant to a development and
license agreement (the "Development Contract") between Biovail and
Intelligent Polymers dated September 30, 1997 whereby Biovail has agreed to
use diligent efforts to conduct toxicity, formulation, development and
clinical studies for, and pursue U.S. regulatory approval of, Intelligent
Polymers' products, as defined and as added to and modified by mutual
agreement.
Since the commencement of Intelligent Polymers' second full fiscal year
preceding the date of the Statement, Intelligent Polymers paid
approximately $400,000 to Biovail pursuant to a services agreement (the
"Services Agreement") between Biovail and Intelligent Polymers dated
September 30, 1997, whereby Biovail has agreed to provide management and
administrative services to Intelligent Polymers for a quarterly fee of
$100,000.
Pursuant to the Development Contract and subject to the Biovail Option
(defined below), Biovail granted Intelligent Polymers a license (the
"License") to manufacture or obtain manufacturing for (subject to an
exclusive manufacturing period granted to Biovail, a right of first refusal
and a right of approval), sell and otherwise market and sublicense other to
market, through the world, (other than Canada), products developed under
the Development Contract or, as to products for which Intelligent Polymers
and Biovail fail to reach agreement as to necessary additional funding,
under other arrangement.
In December 1999, Biovail paid Intelligent Polymers $25.0 million to
acquire a generic version of Procardia XL (the "Additional Product")
developed by Biovail on behalf of Intelligent Polymers. This acquisition
was pursuant to an exercise of the Biovail Option granted under the
Contract Agreement. The Biovail Option grants Biovail a right to purchase
the Additional Product for a price of either a one time cash fee of $25
million or base royalties equal to 10% of the net sales of such product.
(b) Not applicable.
(c) Not applicable.
(d) Not applicable.
(e) While Biovail, Acquireco and Holdco have no commitment or definitive plans,
Biovail would, in the future, have certain rights granted to it as holder
of the Class A and non-voting common shares of Acquireco to cause Acquireco
to become wholly owned by Biovail. If Biovail would not exercise this
option by February 1, 2001, Holdco would have
<PAGE>
the right, as holder of the voting common shares, to cause the sale of any
or all of the property and assets of Acquireco or Intelligent Polymers.
Biovail and Holdco would enter into a voting trust agreement whereby the
holder of the Class A Shares and non-voting common shares of Acquireco
would agree that the holder of the Acquireco voting common shares would be
entitled to cast all the votes attaching to the Acquireco Class A and
non-voting common shares in connection with any vote required for a
liquidation, dissolution or bankruptcy of Acquireco or Intelligent Polymers
or in respect of any sale of all or substantially all of the assets of
Acquireco or Intelligent Polymers.
Item 6. Purpose of the Transaction and Plans or Proposals
(a) Not applicable.
(b)-(c) Subsequent to the Closing Date, Intelligent Polymers would be wholly
owned by Acquireco. Acquireco anticipates that Intelligent Polymers would
be delisted from the AMEX and its reporting requirements with the
Securities and Exchange Commission would be suspended through the filing of
a Form 15.
While Biovail, Acquireco and Holdco have no commitment or definitive plans,
Biovail would, in the future, have certain rights granted to it as holder
of the Class A and non-voting common shares of Acquireco Special Shares to
cause Acquireco to become wholly owned by Biovail. If Biovail would not
exercise this option by February 1, 2001, Holdco would have the right, as
holder of the voting common shares, to cause the sale of any or all of the
property and assets of Acquireco or Intelligent Polymers.
Biovail and Holdco would enter into a voting trust agreement whereby the
holder of the Class A Shares and non-voting common shares of Acquireco
would agree that the holder of the Acquireco voting common shares would be
entitled to cast all the votes attaching to the Acquireco Class A and
non-voting common shares Special Shares in connection with any vote
required for a liquidation, dissolution or bankruptcy of Acquireco or
Intelligent Polymers or in respect of any sale of all or substantially all
of the assets of Acquireco or Intelligent Polymers.
Item 7. Purposes, Alternatives, Reasons and Effects of the Transaction
(a) The purpose of the Transaction would be for Acquireco to acquire
Intelligent Polymers which would have certain products and product
candidates developed or under development pursuant to the Development
Contract dated September 30, 1997 between Biovail and Intelligent Polymers.
(b) Biovail considered retaining the Special Shares and exercising the Purchase
Option itself prior to October 1, 2000. A 13e-3 Transaction Statement was
filed with the Securities and Exchange Commission on August 31, 2000 and
Amendment No. 1 to such 13e-3 Transaction
<PAGE>
Statement was filed on September 6, 2000 and a Notice to Stockholders was
promptly mailed to that effect. Biovail is proposing the transaction with
Acquireco in order to gain the benefit described in Item 7 (c) below.
(c) The Transaction would be structured pursuant to the terms of the previously
granted Purchase Option as set forth in the Bye-Laws. Acquireco would
exercise the Purchase Option prior to October 1, 2000 to enable it to avoid
a 25% increase in the Purchase Option price which occurs after September
30, 2000. The Transaction would be structured to allow for Acquireco to
exercise the Purchase Option and hold the Common Shares of Intelligent
Polymers. Biovail would have certain rights granted to it as the holder of
the Class A shares and the non-voting common shares of Acquireco to cause
Acquireco to become wholly owned by Biovail. The Transaction would be
structured in this manner to defer Biovail's exercise of the Purchase
Option and give Acquireco or the holder of its voting common shares a
profit for acquiring the Special Shares and taking the risk that Biovail
does not exercise its rights to cause Acquireco to become a wholly owned
subsidiary of Biovail.
(d) Subsequent to the Closing Date, Intelligent Polymers would be wholly owned
by Acquireco. Biovail, Acquireco and Holdco anticipate that Intelligent
Polymers would be delisted from the AMEX and its reporting requirements
with the Securities and Exchange Commission suspended through the filing of
a Form 15.
The Transaction would cause each Shareholder to dispose of his or her
Common Shares for the Purchase Option Consideration. This consideration is
the amount specified in the Bye-Laws.
Certain Material U.S. Federal Income Tax Consequences
The following discussion is a summary of certain material U.S. federal
income tax consequences to "U.S. Shareholders" (generally a U.S. citizen or
resident, a corporation under U.S. law or a trust or estate that is
considered a "United States person") if Acquireco exercises the Purchase
Option. This discussion is based upon laws, regulations, rulings and
decisions currently in effect, all of which are subject to change,
retroactively or prospectively.
This discussion does not apply to persons other than U.S. Shareholders and
may not apply to certain categories of U.S. Shareholders subject to special
treatment under the Internal Revenue Code of 1986, as amended (the "Code"),
such as passthrough entities, dealers or traders in securities or
currencies, banks, insurance companies, U.S. Shareholders that do not hold
the Common Shares as capital assets, persons whose "functional currency" is
not the U.S. dollar, tax-exempt entities, and persons that hold Common
Shares as a position in a straddle or as part of a "hedging", "integrated",
"constructive sale" or "conversion" transaction. Moreover, the discussion
summarizes only federal income tax consequences and does not address any
state, local or other tax consequences.
<PAGE>
SHAREHOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS TO DETERMINE THE
SPECIFIC TAX CONSEQUENCES OF THE TRANSACTION TO THEM.
Upon Acquireco's exercise of the Purchase Option, a U.S. Shareholder would
recognize a capital gain or loss on each Common Share disposed of equal to
the difference between the amount of (a) the cash received for the Common
Share and (b) his basis in the Common Share. Gain or loss upon the
disposition of a Common Share generally should be long-term if the Common
Share has been held for more than one year at the time of the exercise of
the Purchase Option.
To the extent that a U.S. Shareholder has not provided an appropriate
taxpayer identification number on IRS Form W-9 or a substitute therefor,
such U.S. Shareholder may be subject to backup withholding by Acquireco.
The exercise of the Purchase Option will not result in any material U.S.
federal income tax consequences to Intelligent Polymers.
Item 8. Fairness of the Transaction
(a) Biovail, Acquireco and Holdco reasonably believe that the Transaction would
be fair to Shareholders.
(b) The material factors upon which the belief stated in Item 8(a) is based are
set forth below.
The Purchase Option was a feature of the Common Shares from the time of
Intelligent Polymers' inception. The Purchase Option and the Purchase
Option Consideration were set forth in the Bye-Laws and described in the
prospectus dated October 10, 1997, distributed in connection with the
initial public offering of the Common Shares (the "Prospectus"). Both the
Bye-Laws and the Prospectus were publicly filed with the Securities and
Exchange Commission. Pursuant to the Bye-Laws, the stock certificates for
the Common Shares were legended to put the holders thereof on further
notice about the Purchase Option. Intelligent Polymers' Annual Reports on
Form 20-F have described the Purchase Option and the Purchase Option
Consideration.
The Purchase Option Consideration of $39.06 is fair because such
consideration for exercise of the Purchase Option prior to October 1, 2000
was a term of the Common Shares from the time of Intelligent Polymers'
inception. The purchase price and trading price of the Common Share
reflected the Purchase Option and the Purchase Option Consideration of
$39.06.
As a result of the foregoing, the Shareholders received adequate notice as
to the terms of the Purchase Option and the price of the Purchase Option
Con-
<PAGE>
sideration prior to making any investment decision with respect to the
Common Shares.
(c) The exercise of the Purchase Option and consummation of the Transaction
would not require the approval of Shareholders.
(d) Biovail, Acquireco and Holdco believe, after making reasonable inquiry of
management of Intelligent Polymers, that no directors of Intelligent
Polymers have retained an unaffiliated representative to act solely on
behalf of any Shareholders, as no action is required by Shareholders to
effect the Purchase Option.
(e) The exercise of the Purchase Option and the consummation of the Transaction
would not require the approval of the Board of Directors of Intelligent
Polymers.
(f) Not applicable.
Item 9. Reports, Opinions, Appraisals and Negotiations
(a) None of Biovail, Acquireco or Holdco nor, to the best of their knowledge
after reasonable inquiry of management of Intelligent Polymers, Intelligent
Polymers has received any report, opinion (other than an opinion of
counsel) or appraisal from an outside party which is materially related to
the Transaction.
(b) Not applicable.
(c) Not applicable.
Item 10. Source and Amount of Funds
(a) The total consideration to be paid by Acquireco for the purchase of the
Common Shares pursuant to the Transaction would be, in the aggregate,
$145,986,750. The source of these funds would be Acquireco's cash.
Acquireco would raise at least 3% of the capital required in order to
exercise the Purchase Option from the issuance of all the voting common
shares of Acquireco (the "Acquireco Common Shares") to Holdco. In the event
that Biovail and Holdco reach a mutually satisfactory agreement prior to
the closing of the transaction, Holdco would have the capital to enable it
to purchase the Acquireco Common Shares as a result of an investment by
Andrew Gaspar, the holder of Holdco's common shares and the Investor Group,
of funds.
In the event that Biovail and Holdco do not reach a mutually satisfactory
agreement prior to the closing of the transaction, Biovail would fund, with
its available cash, the funds purchase by a wholly owned subsidiary of the
Acquireco Common Shares.
<PAGE>
Acquireco would raise the remaining capital required in order for it to
exercise the Purchase Option from the issuance of Class A and non-voting
common shares of Acquireco to Biovail. Pursuant to the By-Laws of
Acquireco, Biovail, as holder of the Class A and non-voting common shares
of Acquireco, would have certain rights to cause Acquireco to become wholly
owned by Biovail.
(b) Acquireco has no alternative financing arrangements or plans to those
discussed above in paragraph (a) of this item.
(c) The following table sets forth an estimate (except for the filing fee) of
expenses for the Transaction
Filing fee............................ $ 29,198
Accounting fees and expenses.......... 50,000
Legal fees and expenses............... 300,000
Printing expenses..................... 75,000
Fees & expenses for the Investment by 2,000,000
---------
Holdco
Total............... 2,454,198
The expenses set forth in the table above will be paid by Biovail.
(d) Not applicable
Item 11. Interest in Securities of Intelligent Polymers
(a) As of August 30, 2000, no Common Shares are beneficially owned by either
Biovail or Acquireco, by any pension, profit sharing or similar plan of
either Biovail, Acquireco or, to Biovail's and Acquireco's knowledge after
reasonable inquiry of management of Intelligent Polymers, by Intelligent
Polymers, by each executive officer and director of either Biovail,
Acquireco, Intelligent Polymers, any person controlling either Biovail,
Acquireco or Intelligent Polymers or any executive officer of any
corporation ultimately in control of either Biovail, Acquireco or
Intelligent Polymers, or by any associate or majority owned subsidiary of
either Biovail, Acquireco or Intelligent Polymers except as set out on the
following table:
<TABLE>
<CAPTION>
Direct Indirect
Name Position Ownership Ownership
-------------------------------- ------------------------- ------------ --------------
<S> <C> <C> <C>
Eugene Melnyk Chairman of the Board 17,500 20,000(1)
and Director of Biovail
Roger Rowan Director of Biovail 16,500
Wilfred Bistrow Director of Biovail -- 10,000(1)
</TABLE>
(1) owned by spouse
<PAGE>
(b) Not applicable.
Item 12. The Solicitation or Recommendation
(d) Not applicable.
(e) Not applicable.
Item 13. Financial Statements
(a) (1) Intelligent Polymers' financial data is attached (by incorporation by
reference) to this statement as Exhibits 99.1 and 99.2.
(2) Intelligent Polymers is not required to file quarterly reports.
(3) Intelligent Polymers has no material fixed charges for the two most
recent fiscal years and the appropriate interim period.
(4) Intelligent Polymers' book value per share as of June 30, 1999 was
$6.31.
(b) Biovail and Acquireco do not believe the pro forma disclosure required by
this Item 13(b) is applicable because Intelligent Polymers would terminate
upon giving effect to the Transaction.
Item 14. Persons/Assets, Retained, Employed, Compensated or Used
(a) Not Applicable.
(b) Pursuant to the Bye-Laws, the Board of Intelligent Polymers must provide
notice to Shareholders prior to the Closing Date.
Item 15. Other Material Information
Not applicable.
Item 16. Exhibits
1.1 Notice to Stockholders of Intelligent Polymers
<PAGE>
99.1 Financial Statements for the year ended June 30, 19991
99.2 Financial Statements for the year ended June 30, 19982
----------
1 Incorporated by reference to Intelligent Polymers' Annual Report on Form
20-F for the year ended June 30, 1999, filed with the SEC on December 30,
1999.
2 Incorporated by reference to Intelligent Polymers' Transition Report on
Form 20-F for the year ended June 30, 1998, filed with the SEC on December
31, 1998.
<PAGE>
SIGNATURE
After due inquiry and to the best of the knowledge and belief of the
undersigned, the undersigned certify that the information set forth in this
statement is true, complete and correct.
September 25, 2000
BIOVAIL CORPORATION
By: /s/ Brian Crombie
-----------------------------------------
Name: Brian Crombie
Title: Chief Financial Officer
IPL ACQUIRECO 2000 LTD.
By: /s/
---------------------------------------
Name:
Title:
[Signature to be provided by amendment]
IPL HOLDCO 2000 LTD.
By: /s/
---------------------------------------
Name:
Title:
[signature to be provided by amendment]
