BOSTON, Jan 12, 2009 (BUSINESS WIRE) --
Orthofix International N.V. (NASDAQ: OFIX) (the Company) announced today
that it has sent the following letter from the Chairman of the Company's
Board of Directors to Ramius, LLC in response to their proposal to call
a special meeting of shareholders.
Jeffrey Smith
Ramius Capital
599 Lexington Ave.
New York, NY 10022
Dear Jeffrey:
I am writing on behalf of the Board of Directors of Orthofix
International N.V. to express our fundamental disagreement with Ramius's
assertion that Orthofix's shareholders would benefit from the sale of
the Blackstone Medical spine business. We also believe that Ramius's
efforts to elect up to four Ramius-supported nominees to the Orthofix
Board would damage shareholder value.
The purpose of this letter, however, is to address your request to call
a special meeting of shareholders to consider your proposals. As you
know, Orthofix holds an annual meeting of shareholders each year in
June. A similar meeting will be held in 2009. As part of our commitment
to strong corporate governance we do not use a staggered election
process for our Board of Directors. Rather, our governance practices
require the annual election of our entire Board, the majority of which
is composed of independent directors. These practices, and other
elements of our corporate governance, are consistent with the best
practice guidance endorsed by corporate governance experts. Accordingly,
we believe that your request for a special meeting would be duplicative,
distracting to management and a waste of shareholder resources. After
all, if a special meeting results from this process it will still be
necessary for us to hold our required annual general meeting this year.
Particularly in these challenging economic times, the Board and
management team of Orthofix are focused on ensuring that corporate
resources are invested wisely. In contrast, the process of calling and
holding the special meeting that Ramius is recommending would require
unnecessary additional costs for all of our shareholders . We believe
these funds can be better spent elsewhere, for example to make another
early debt repayment or for some other appropriate corporate purpose. We
find your request to be focused on the short-term objectives of Ramius,
rather than considering what will maximize value for the Company's
shareholder base as a whole.
In the coming weeks, we will be communicating regularly with our
shareholders to ensure that they understand why the Board of Directors
believes that the Ramius approach to the Orthofix business is
fundamentally flawed on a substantive level. As you know, we engaged
Morgan Stanley as a strategic partner to thoroughly review and assess a
number of strategic alternatives, including those related to the
Blackstone business. After Morgan Stanley's review, the Board
unanimously affirmed its commitment to Blackstone and Orthofix's spine
strategy.
Additionally, the Board and management are making significant progress
in executing a strategic plan that is sound, and that we believe will
maximize shareholder value. In December, we announced the achievement of
the major milestone in the development of a stem cell-based allograft in
partnership with the Musculoskeletal Transplant Foundation. As a result
of this achievement we now expect full commercialization of this new
allograft by June 2009. Additionally, we are currently planning first
quarter launches of two key new products, the Firebird(TM) pedicle screw
system and the PILLAR(TM) SA interbody device. Steps have also been taken
to rationalize expenses and create greater supply chain efficiencies.
And, Orthofix announced a $10 million partial debt repayment in
December. This payment was made ahead of the debt's maturity date and is
a reflection of the confidence that the Board and management have in the
expected performance of all our businesses going forward, including
Blackstone.
In short, the Board unanimously believes the Ramius proposal runs
counter to the best interests of Orthofix's shareholders. The request to
call a special meeting of shareholders will waste money and cause
needless distraction for our management team, which we would prefer
remain focused on our businesses. We believe if Ramius chooses to spend
money in such an inefficient and, frankly, wasteful way, those dollars
should come from Ramius, not from all of Orthofix's shareholders. To
that end, if a special meeting results from the current consent
solicitation process, we would expect that Ramius will fully pay the
costs of any such special meeting
Sincerely,
James F. Gero
Chairman, Board of Directors
About Orthofix
Orthofix International, N.V., a global medical device company, offers a
broad line of minimally invasive surgical, and non-surgical, products
for the spine, orthopedic, and sports medicine market sectors that
address the lifelong bone-and-joint health needs of patients of all
ages-helping them achieve a more active and mobile lifestyle. Orthofix's
products are widely distributed around the world to orthopedic surgeons
and patients via Orthofix's sales representatives and its subsidiaries,
including BREG, Inc. and Blackstone Medical, Inc., and via partnerships
with other leading orthopedic product companies. In addition, Orthofix
is collaborating in R&D partnerships with leading medical institutions
such as the Musculoskeletal Transplant Foundation, the Orthopedic
Research and Education Foundation, Rutgers University, the Cleveland
Clinic Foundation, Texas Scottish Rite Hospital for Children and
National Osteoporosis Institute. For more information about Orthofix,
please visit www.orthofix.com.
Forward-Looking Statements
This communication contains certain forward-looking statements under the
Private Securities Litigation Reform Act of 1995. These forward-looking
statements, which may include, but are not limited to, statements
concerning the projections, financial condition, results of operations
and businesses of Orthofix and its subsidiaries and are based on
management's current expectations and estimates and involve risks and
uncertainties that could cause actual results or outcomes to differ
materially from those contemplated by the forward-looking statements.
Factors that could cause or contribute to such differences may include,
but are not limited to, risks relating to the expected sales of its
products, including recently launched products, unanticipated
expenditures, changing relationships with customers, suppliers and
strategic partners, risks relating to the protection of intellectual
property, changes to the reimbursement policies of third parties,
changes to and interpretation of governmental regulation of medical
devices, the impact of competitive products, changes to the competitive
environment, the acceptance of new products in the market, conditions of
the orthopedic industry and the economy, corporate development and
market development activities, including acquisitions or divestitures,
unexpected costs or operating unit performance related to recent
acquisitions and other factors described in our annual report on Form
10-K and other periodic reports filed by the Company with the Securities
and Exchange Commission.
Where You Can Find Additional
Information
Ramius Capital and certain of its affiliates have filed a definitive
proxy statement with the SEC to solicit written requests from
shareholders of Orthofix to call a special general meeting of
shareholders for the purpose of making changes to the composition of
Orthofix's board of directors. Orthofix has filed with the SEC a
preliminary proxy statement in connection with its intent to solicit
written requests from shareholders in opposition to Ramius'
solicitation. If Orthofix holds a special general meeting at Ramius' and
other shareholders' request, Orthofix intends to file with the SEC, and
distribute to shareholders, a proxy statement opposing proposals made by
Ramius. SHAREHOLDERS ARE URGED TO READ ORTHOFIX'S DEFINITIVE PROXY
MATERIALS AND ANY OTHER RELEVANT SOLICITATION MATERIALS FILED WITH THE
SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION. Investors and shareholders may obtain (when they are
available) a free copy of proxy statements filed with the SEC by
Orthofix at the SEC's website at www.sec.gov
or by contacting Georgeson, 199 Water Street, 26th Floor, New
York, NY 10038 or by calling (212) 440-9800 (bankers and brokers) or
toll-free (800) 323-4133 (all others).
Orthofix International N.V. and its directors and certain executive
officers are participants in the solicitation of consent revocations
from shareholders of Orthofix, as well as the solicitation of proxies in
connection with a special general meeting of shareholders, if such a
meeting is called. The names of such persons are: James F. Gero, Peter
J. Hewett, Jerry C. Benjamin, Charles W. Federico, Dr. Guy J. Jordan,
Ph.D., Thomas J. Kester, CPA, Alan W. Milinazzo, Maria Sainz, Dr. Walter
P. von Wartburg, Kenneth R. Weisshaar, Robert S. Vaters, Michael
Simpson, Bradley R. Mason, Raymond C. Kolls, J.D. and Michael M.
Finegan. Information regarding such participants, as well as each such
person's respective interests in Orthofix by security holdings or
otherwise, is set forth in Orthofix's proxy statement relating to the
2008 annual general meeting of shareholders, which may be obtained free
of charge at the SEC's website at www.sec.gov
and Orthofix's website at www.orthofix.com.
More current information regarding such persons, as well as each such
person's respective interests in Orthofix by security holdings or
otherwise, will be set forth in the definitive proxy statement materials
to be filed with the SEC and distributed to shareholders by Orthofix as
described above.
SOURCE: Orthofix International
Orthofix International N.V.
Dan Yarbrough, 617-912-2903
Vice President of Investor Relations
danyarbrough@orthofix.com
Copyright Business Wire 2009
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