Biofrontera files lawsuit against W.K.T. Zours, Deutsche Balaton AG and further defendants
June 12 2018 - 8:00AM
Biofrontera AG (NASDAQ: BFRA; Frankfurt Stock Exchange: B8F) (the
“Company”), an international biopharmaceutical company, today
announced that it has filed a complaint in the United States
District Court for the Southern District of New York against
Wilhelm Konrad Thomas Zours (“Zours”), Deutsche Balaton AG
(“Deutsche Balaton”), DELPHI Unternehmensberatung AG, VV
Beteiligungen AG, ABC Beteiligungen AG, Deutsche Balaton Biotech AG
(“DB Biotech”) (collectively, the “Balaton Defendants”), alleging,
among other things, that the Mr. Zours and the other Balaton
Defendants have violated federal and state laws in various ways,
particularly in connection with DB Biotech’s unsolicited offer to
purchase up to 6,250,000 of the Company’s shares in exchange for
per-share consideration consisting of one euro plus a warrant
entitling the holder thereof to purchase a share of the Company for
the price of one euro. The Balaton Defendants together are major
shareholders of the Company. Please see Item 7.A—Major Shareholders
of the Company’s Annual Report on Form 20-F, filed with the U.S.
Securities and Exchange Commission (the “Commission”) on April 30,
2018, for more information on the Balaton Defendants’ holdings of
the Company’s shares.
As announced on June 11, 2018, the Company’s
management board and supervisory board have published, pursuant to
German law, a joint opinion stating their belief that the
consideration offered by DB Biotech is insufficient and that
successful completion of the tender offer would not be in the
interests of the Company and its subsidiaries, its employees or its
shareholders, but instead could significantly damage them, and
their recommendation that the Company’s shareholders should not
accept the offer.
The Company’s complaint against the Defendants alleges, in
particular, that:
- The Balaton Defendants have violated and continue to violate
Section 13(d) of the U.S. Securities Exchange Act of 1934 (the “34
Act”) and the rules thereunder by failing to file a beneficial
ownership report on Schedule 13D with the Commission when they were
required to do so by U.S. federal securities laws. The Schedule 13D
which provides critical information to the Company, its
shareholders and other investors or potential investors in the
Company relating to the identity, resources and intentions of major
shareholders.
- The Balaton Defendants have purchased significant amounts of
the Company’s shares following public announcement of a tender
offer, in violation of the Commission’s Rule 14e-5 under the 34 Act
and rules regarding market manipulation, which is a rule designed
to prevent fraudulent, deceptive or manipulative acts or practices
in connection with a tender offer for equity securities.
- By publicly offering warrants in the U.S. as part of its tender
offer consideration without filing a registration statement
regarding those securities with the Commission, DB Biotech is
engaged in an unlawful public offering of securities in the U.S. in
violation of Section 5 of the U.S. Securities Act of 1933.
- By knowingly or recklessly publishing false and defamatory
statements regarding the competency of Biofrontera and its officers
and directors and the legality of their actions, Deutsche Balaton
and Zours engaged in deceptive and manipulative acts and practices
in connection with DB Biotech’s tender offer for the Company’s
shares, attempting to depress the Company’s share price in order to
make the tender offer more attractive.
- Deutsche Balaton and Zours have engaged in libel and trade
libel against the Company and its officers and directors by
publicly issuing letters containing multiple written defamatory
statements concerning Biofrontera which were false and misleading.
These letters were available to all on the internet.
- Acting out of malice, Deutsche Balaton and Zours tortuously and
intentionally interfered with the Company’s initial public offering
of American Depositary Shares in the U.S. by publishing false and
misleading and defamatory statements on its website while the
Company was conducting a U.S. road show and soliciting prospective
investors in the U.S.
In addition, the complaint alleges that Axxion
S.A. (“Axxion” and, together with the Balaton Defendants, the
“Defendants”) has acted in concert with the Balaton Defendants to
form a group for the purpose of acquiring and holding the Company’s
shares for the purpose or effect of changing or influencing control
of the Company, without filing a Schedule 13D as required by U.S.
federal securities laws. The Company believes that Axxion and the
Balaton Defendants have acted in concert with respect to their
holdings of the Company’s shares since February 2016.
These acts are part of a long, concerted and
malicious campaign by the Balaton Defendants to embarrass,
discredit, distract and injure the Company and its employees,
officers, directors and other stakeholders and to control the
Company but without acquiring a controlling stake in the Company’s
shares. Moreover, the Company’s management believes that the
Balaton Defendants have taken these actions—in particular their
publication of defamatory and libelous statements about the Company
and its management—in order to manipulate and depress the price of
the Company’s shares to increase the attractiveness of DB Biotech’s
tender offer.
The Company is seeking the following relief (among other
remedies):
- Compensatory and punitive damages to compensate the Company for
injuries suffered as a result of Deutsche Balaton’s and Zours’s
libel, trade libel and tortious interference with their business
opportunities.
- A declaration that the Defendants have violated Section 13(d)
of the 34 Act by failing to file with the Commission a beneficial
ownership report on Schedule 13D to provide the Company, its
shareholders and other investors or potential investors in the
Company with critical information that they need in order to make
investment decisions.
- A declaration that the Balaton Defendants have violated Rule
14e-5.
- An injunction mandating the Defendants to file an appropriate
Schedule 13D with the Commission and barring them from voting any
of their shares, acquiring any shares or otherwise trying to
acquire shares of or change or influence control of the Company
until six months after such complete and accurate Schedule 13D is
filed with the Commission.
- An injunction barring the Balaton Defendants from purchasing
any additional shares of the Company or voting any shares that they
purchased during the tender offer for a period of six months, and
certain other relief.
Important Information:
This communication is neither an offer to
purchase nor the solicitation of an offer to sell any securities.
In response to the tender offer commenced by DB Biotech referred to
in this communication, the Company’s management board and
supervisory board have published, pursuant to German law, a joint
opinion with respect to the tender offer (the “Joint Opinion”). The
Joint Opinion has been furnished to the Commission on a Form 6-K
submitted by the Company. Investors and security holders are urged
to read the Joint Opinion and any other relevant documents filed
with the SEC (when available), because they contain important
information. Investors and security holders may obtain a free copy
of the Joint Opinion and other documents (when available) that the
Company files with the SEC at the SEC's website at www.sec.gov and
the Company’s website at https://www.biofrontera.com/en/.
-End-
About Biofrontera:
Biofrontera AG is an international
biopharmaceutical company specializing in the development and
commercialization of a platform of pharmaceutical products for the
treatment of dermatological conditions and diseases caused
primarily by exposure to sunlight that results in sun damage to the
skin. Biofrontera’s approved products focus on the treatment in the
U.S. and Europe of actinic keratoses, which are skin lesions that
can sometimes lead to skin cancer, as well as the treatment of
certain forms of basal cell carcinoma in the European Union.
American Depositary Shares representing Biofrontera’s ordinary
shares are listed on the NASDAQ Capital Market under the symbol
“BFRA”, and Biofrontera’s ordinary shares are listed in the
Frankfurt Stock Exchange (B8F, ISIN: DE0006046113). Information is
also available at www.biofrontera.com.
Forward Looking Statements:
Certain statements in this press release are
forward-looking within the meaning of the Private Securities
Litigation Reform Act of 1995 regarding the public offering and the
intended use of proceeds from the offering. These statements may be
identified by the use of forward-looking words such as
“anticipate,” “believe,” “forecast,” “estimate” and “intend,” among
others. Such forward-looking statements are based on the currently
held beliefs and assumptions of the management of Biofrontera AG,
which are expressed in good faith and, in their opinion,
reasonable. Forward-looking statements involve known and unknown
risks, uncertainties and other factors, which may cause the actual
results, financial condition, performance, or achievements of the
Company, or industry results, to differ materially from the
results, financial condition, performance or achievements expressed
or implied by such forward-looking statements. These risks,
uncertainties and other factors are set forth in the Registration
Statement on Form F-1 filed with the SEC, including in the section
“Risk Factors,” and in future reports filed with the SEC. Given
these risks, uncertainties and other factors, prospective investors
are cautioned not to place undue reliance on these forward-looking
statements. The Company does not undertake an obligation to update
or revise any forward-looking statement.
Enquiries, please contact:
Biofrontera AG
Thomas Schaffer, Chief Financial Officer
+49 (0) 214 87 63 2 0
ir@biofrontera.com
IR UK: Seton Services
Toni Vallen
+44(0) 20 7729 0805
IR and PR US: The Ruth Group
IR: Tram Bui
+1 646-536-7035
PR: Kirsten Thomas
+1 508-280-6592
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