AEterna Zentaris Announces Details of Distribution of its Remaining Shares of Atrium Biotechnologies Inc.
October 25 2006 - 8:30AM
PR Newswire (US)
QUEBEC CITY, Oct. 25 /PRNewswire-FirstCall/ -- AEterna Zentaris
Inc. (TSX: AEZ; NASDAQ: AEZS), a growing global biopharmaceutical
company focused on endocrine therapy and oncology, announced today
that its Board of Directors has approved the convening of a Special
Meeting of Shareholders on December 15, 2006 for the purpose of
submitting to shareholders for their approval a resolution
authorizing the distribution of all 11,052,996 subordinate voting
shares of Atrium Biotechnologies held by AEterna Zentaris by way of
reduction of the stated capital of AEterna Zentaris' common shares.
AEterna Zentaris' shareholders of record as of the close of
business on November 14, 2006 will be entitled to receive notice of
and vote at the Special Meeting of Shareholders to be held on
December 15, 2006. An Information Circular providing details with
respect to the proposed reduction of stated capital and special
distribution of subordinate voting shares of Atrium Biotechnologies
will be mailed to AEterna Zentaris shareholders in the coming weeks
and will be available on the Internet at
http://www.aeternazentaris.com/ as well as on the SEDAR website at
http://www.sedar.com/. If approved by AEterna Zentaris'
shareholders, it is currently anticipated that the special
distribution of Atrium Biotechnologies shares to AEterna Zentaris
shareholders will be completed in early January 2007 and, shortly
following the Special Meeting of Shareholders, AEterna Zentaris
will announce the specific record date and distribution date for
the special distribution as determined by the Board of AEterna
Zentaris. The timing and completion of the distribution will be
subject to compliance with Canadian and U.S. securities laws and
receipt by the Company of certain approvals and confirmations from
regulatory authorities and counsel. Based on AEterna Zentaris'
53,160,970 common shares that are currently issued and outstanding,
AEterna Zentaris shareholders would receive approximately 0.2079 of
an Atrium Biotechnologies subordinate voting share for each one of
their AEterna Zentaris common shares (which represents slightly
more than a 1:5 ratio). No fractional subordinate voting shares of
Atrium Biotechnologies will be distributed to registered
shareholders of AEterna Zentaris pursuant to the return of capital
and any such fractional shares will be rounded down to the nearest
whole number. Any tax payable by an AEterna Zentaris shareholder on
the special distribution of Atrium Biotechnologies subordinate
voting shares will be payable in respect of the shareholder's
taxation year in which the date of distribution falls. Below is a
summary of certain tax consequences under Canadian and United
States federal income tax laws and a more detailed description of
certain tax consequences under Canadian and United States federal
income tax laws will be included in the Information Circular that
will be sent to AEterna Zentaris shareholders in connection with
the Special Meeting to be held on December 15, 2006. This summary
is of a general nature only and is not intended to be, nor should
it be construed to be, legal or tax advice to any particular
shareholder of AEterna Zentaris. Shareholders of AEterna Zentaris
are urged to consult their own tax advisors for advice concerning
the tax consequences of the special distribution by AEterna
Zentaris of subordinate voting shares of Atrium Biotechnologies in
their circumstances. AEterna Zentaris believes that this
distribution will be free of Canadian tax to shareholders whose
adjusted cost base for tax purposes of the AEterna Zentaris common
shares is equal to or greater than the fair market value, at the
time of distribution, of the Atrium Biotechnologies subordinate
voting shares distributed to such shareholders. In addition,
AEterna Zentaris believes that the distributions will not be
subject to Canadian withholding tax when paid to a non-resident
shareholder. AEterna Zentaris has applied for an advance income tax
ruling confirming the Canadian tax treatment of the distribution. A
detailed description of the Canadian federal income tax
consequences of the distribution will be included in the
Information Circular that will be sent to AEterna Zentaris
shareholders in connection with the Special Meeting to be held on
December 15, 2006. For holders of AEterna Zentaris common shares
who are U.S. persons (as defined for U.S. federal income tax
purposes) and hold their shares as capital assets, the gross amount
of the special distribution of the subordinate voting shares of
Atrium Biotechnologies will generally be included as a dividend in
the gross income of such U.S. shareholders to the extent such
distribution is paid from AEterna Zentaris' current and/or
accumulated earnings and profits for the taxable year of the
distribution (as determined under U.S. federal income tax rules).
The amount by which the special distribution exceeds AEterna
Zentaris' current and/or accumulated earnings and profits for the
taxable year of the distribution, as determined under U.S. federal
income tax rules, will be treated first as a return of capital to
the extent of each U.S. shareholder's adjusted tax basis in the
AEterna Zentaris common shares with regard to which the
distribution is made and any remaining excess amount will be
treated as capital gain. AEterna Zentaris will not calculate its
earnings and profits under U.S. federal income tax rules and it
does not currently intend to provide United States holders with
such information. U.S. holders should consult their own tax
advisors regarding the treatment of the special distribution to
them for U.S. federal income tax purposes and for estate, state or
local tax purposes, including any special tax rules that may be
applicable to the special distribution as well as the amount of the
special distribution that will be treated as a dividend for U.S.
federal income tax purposes. A detailed description of certain U.S.
federal income tax consequences of the special distribution will be
included in the Information Circular that will be sent to AEterna
Zentaris shareholders in connection with the Special Meeting to be
held on December 15, 2006. This press release shall not constitute
an offer to sell or the solicitation of an offer to buy any
securities in any jurisdiction. The subordinate voting shares of
Atrium Biotechnologies have not been, and will not be, registered
under the U.S. Securities Act of 1933, as amended, or any state
securities laws, and may not be offered or sold in the United
States absent registration or an applicable exemption from
registration requirements. About AEterna Zentaris Inc. AEterna
Zentaris Inc. is a growing global biopharmaceutical company focused
on oncology and endocrine therapy with proven expertise in drug
discovery, development and commercialization. News releases and
additional information are available at
http://www.aeternazentaris.com/. Forward-Looking Statements This
press release contains forward-looking statements made pursuant to
the safe harbor provisions of the U.S. Securities Litigation Reform
Act of 1995. Statements that are not historical facts, including
statements preceded by, followed by, or that include the words
"believes", "anticipates", "intends", "plans", "expects",
"estimates", "will," "may", "should", "approximately", and the
negative or other variations of those terms or comparable
terminology, are forward-looking statements. Such statements
reflect management's current views, intentions, strategies and
plans and are based on certain assumptions. Forward-looking
statements involve known and unknown risks and uncertainties, which
could cause the Company's actual results to differ materially from
those in the forward-looking statements. Such risks and
uncertainties include, among others, the possibility that
shareholders will not approve the special distribution of the
remaining subordinate voting shares of Atrium Biotechnologies and
the ability of AEterna Zentaris to complete the special
distribution in the manner described herein, whether AEterna
Zentaris will be able to implement its business strategies, the
availability of funds and resources to pursue R&D projects, the
successful and timely completion of clinical studies, the ability
of AEterna Zentaris to take advantage of business opportunities in
the pharmaceutical industry, uncertainties related to the
regulatory process and general changes in economic conditions.
Investors should consult the Company's quarterly and annual filings
with the Canadian and U.S. securities commissions for additional
information on risks and uncertainties relating to the
forward-looking statements. Investors are cautioned not to rely on
these forward-looking statements. The Company does not undertake to
update these forward-looking statements. DATASOURCE: AETERNA
ZENTARIS INC. CONTACT: Media Relations: Paul Burroughs, (418)
652-8525 ext. 406, ; Investor Relations: Jenene Thomas, (418)
655-6420, (908) 996-3154,
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