1
XXXXXX PHARMACEUTICAL, INC.
00 XXXX XXXX
XXXXXX, XX 00000
August 16, 1999
To Our Stockholders:
I am pleased to inform you that Xxxxxx Pharmaceutical, Inc. (the
"Company"), Teva Pharmaceuticals USA, Inc. ("Parent") and Caribou Merger
Corporation, a wholly owned subsidiary of Parent ("Merger Sub"), have entered
into an Agreement and Plan of Merger dated as of August 9, 1999 (the "Merger
Agreement") pursuant to which Merger Sub has commenced a cash tender offer (the
"Offer") to purchase all of the outstanding shares of the Company's Common Stock
(the "Shares") for $11.00 per share. Under the Merger Agreement, the Offer will
be followed by a merger of Merger Sub with and into the Company (the "Merger")
in which any remaining Shares (other than Shares held in the treasury of the
Company, Shares owned by Parent, Merger Sub or any other wholly owned subsidiary
of Parent or the Company, and Shares as to which appraisal rights have been
properly exercised) will be converted into the right to receive $11.00 per Share
in cash, without interest. The Offer is conditioned upon, among other things,
the tender of a majority of the number of Shares outstanding on a fully diluted
basis (excluding options with an exercise price of $11.00 or more).
YOUR BOARD OF DIRECTORS, INCLUDING THE MEMBERS OF THE SPECIAL COMMITTEE OF
INDEPENDENT DIRECTORS, HAS UNANIMOUSLY APPROVED AND DECLARED ADVISABLE THE
MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER
AND THE MERGER, DETERMINED THAT THE OFFER AND THE MERGER ARE FAIR TO AND IN THE
BEST INTERESTS OF THE COMPANY'S STOCKHOLDERS, AND RECOMMENDS THAT STOCKHOLDERS
ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
In arriving at its recommendations, the Board of Directors gave careful
consideration to a number of factors described in the attached Schedule 14D-9
that has been filed with the Securities and Exchange Commission, including,
among other things, the opinion of CIBC World Markets Corp., the financial
advisor retained by the Board of Directors, to the effect that, as of August 9,
1999, the $11.00 in cash to be received by the holders of Shares (other than
Hoechst Corporation or any of its affiliates) in the Offer and Merger is fair to
such holders from a financial point of view.
Pursuant to a Stockholder Agreement dated as of August 9, 1999 by and among
Parent, Merger Sub and Hoechst Corporation, the holder of approximately 51% of
the Company's outstanding Shares ("Hoechst"), Hoechst has agreed to tender (and
not withdraw) the Shares it owns in the Offer.
In addition to the attached Schedule 14D-9 relating to the Offer, also
enclosed is the Offer to Purchase, dated August 16, 1999, of Merger Sub,
together with related materials, including a Letter of Transmittal to be used
for tendering your Shares. These documents set forth the terms and conditions of
the Offer and the Merger and provide instructions as to how to tender your
Shares. We urge you to read the enclosed material carefully.
Sincerely,
/s/ Xxxxxx X. Xxxxxxxxxxx
Xxxxxx X. Xxxxxxxxxxx
President and Chief Executive Officer
