Biovail shareholder group says dispute is about reform, not Melnyk

By Lisa Kerner

Charlotte, N.C., May 15 - The Concerned Shareholders of Biovail accused Biovail Corp. of continuing to mislead its shareholders by making the focal point of their dispute Biovail's former chief executive officer, Eugene Melnyk.

Melnyk requested a special meeting, which will be held May 28, for the purpose of approving corporate governance resolutions and electing two of his nominees to the board of directors.

"It should be evident to shareholders that, as opposed to Biovail's surprisingly combative approach to the requisition, the requisition was not intended to cause and should not have caused such a dramatic and costly reaction by Biovail," the group, which includes Melnyk and EM Holdings BV, said in a news release.

Melnyk, the Toronto specialty pharmaceutical company's largest shareholder, and EM Holdings previously announced they would focus their efforts on "certain key governance proposals" and not the full package of proposals set forth in its Feb. 25 requisition filed with Biovail.

As a result, the group will solicit proxies in respect to majority voting, individual director voting, proxy access and the treatment of severance arrangements under Biovail's employment agreements, according to Melnyk.

The shareholder group said recent governance reforms made by Biovail validate its belief that "improvements were and continue to be necessary."

Melnyk and EM Holdings filed a dissident proxy circular in connection with their solicitation of proxies for the election of Paul Haggis and Frank Potter to Biovail's board of directors to replace current Biovail directors Michael Van Every and Dr. Laurence E. Paul.

Haggis was president and CEO of Omers and is currently the chairman of Alberta Enterprise Corp., a new venture fund created by the government of Alberta, Canada.

Potter is chairman of Emerging Market Advisors, Inc. and chairman of Canadian Tire Bank.

In April, Biovail sent a letter to its shareholders asking them to vote in favor of the company's director nominees and resolutions at the annual meeting.

Biovail accused Melnyk of "once again attempting to exert undue influence" over the company.

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