Israel Chemicals (ICL) is selling Perio to pharmaceutical company Dexxon, according to an agreement signed between the parties at the end of the week, after Dexxon had already announced it was canceling the deal. The deal amounts to $35 million, and ICL will make a capital gain of $24 million on the deal.
At the beginning of the month, ICL decided to sell its holdings in pharmaceutical company Perio (85%) to Dexxon, which specializes in development and manufacture of delayed-release drugs. Perio developed "Perio Chip" for the treatment of dental diseases, based on delayed-release treatment. The remaining shares in Perio are held by German investment bank DEG.
At the beginning of the week, Dexxon general manager Dan Oren announced the cancellation of the deal. Dexxon claimed that resignation of Perio executive Dr. Moshe Falshner was not disclosed prior to the signing of the agreement. Oren claimed that Falshner was the force behind Perio, and his resignation would harm the company. ICL rejected the argument and announced that it would employ all means to bring about implementation of the deal.
Advs. Ram Caspi and Adi Kaplan, acting on behalf of ICL, advised Dexxon in writing that ICL believed cancellation of the deal was improper. ICL believed Falshner's resignation was irrelevant and had no impact on the legal ties between ICL and Dexxon.
At the end of the week, Dexxon and ICL managers and legal advisors met. Following the discussions, Dexxon retracted its statement whereby it announced it would not acquire Perio. Dexxon and ICL signed an agreement stipulating that the contract between them for the sale by ICL of Perio's shares to Dexxon was valid.
Published by Israel's Business Arena August 22, 1999