Disposal

RNS Number:7276S
Galen Holdings PLC
02 December 2003

                                                               2nd December 2003


                  NOT FOR RELEASE OR DISTRIBUTION IN OR INTO
                 AUSTRALIA, CANADA, JAPAN OR THE UNITED STATES

                               GALEN HOLDINGS PLC

   Disposal of Pharmaceutical Development and Manufacturing Services Business


Craigavon, Northern Ireland, UK / Rockaway, New Jersey, US.

Galen Holdings PLC ("Galen" or the "Company") (LSE:GAL, Nasdaq: GALN) the
international specialty pharmaceutical company, announces that it has today
disposed of its Pharmaceutical Development and Manufacturing Services business
("PDMS") which forms part of its contract manufacturing business, for a total
cash consideration of #20 million ($34 million). In the year ended 30 September
2003, PDMS achieved sales of $17.8 million (2002 : $17.1 million).  As at 30
September 2003, its net assets were $34 million.


PDMS provides a broad range of specialist services for the pharmaceutical,
healthcare and biotechnology industries including drug product formulation,
process development, analytical method development and validation, pack design,
commercial-scale manufacture, inventory management and distribution. As part of
the agreement, PDMS will enter into a supply agreement with Galen to continue to
manufacture, supply and distribute a number of Galen's products for the UK and
Irish market.


The purchaser of the PDMS business is a company under the control of Dr. Allen
McClay, the founder and a former Chairman of Galen.  Whilst the disposal was not
conditional on financing, Dr McClay has indicated to the Company that he intends
to instruct Hoare Govett Limited ("Hoare Govett") (as his agent) to sell
4,280,000 existing Galen Ordinary Shares (the "Placing Shares") on his behalf
through an accelerated bookbuilt placing (the "Placing"). Further terms of the
Placing, which has been underwritten by Hoare Govett, have been provided by
Hoare Govett and are set out in the appendix to this press announcement.  Dr
McClay currently owns 16,286,469 ordinary shares representing 8.6% of the
Company's share capital. This will reduce to 6.3% after the Placing.


Galen reserves the right to participate in the Placing, or otherwise to
repurchase its shares, by using its general authority from shareholders to buy
back ordinary shares if it considers that in the circumstances it would be in
the best interests of the Company and its shareholders to do so.


Commenting on the disposal, Roger Boissonneault, Chief Executive of Galen said "
As we expand our business, we no longer see contract manufacturing as a core
activity.  This transaction is in line with our strategy to focus the Company on
its fast growing pharmaceutical products business."


                                   #   #   #


For further information please contact :


Galen Holdings PLC

David G. Kelly, 
Sr. Vice President, Finance and Planning:     Tel:   [phone]


Financial Dynamics

Andrew Dowler                                 Tel:   [phone]

                                   #   #   #

Hoare Govett

Equity Syndicate
Lee Morton                                    Tel    [phone]
Jeremy Thompson                               Tel    [phone]

Corporate Broking
Andrew Chapman                                Tel    [phone]
Andrew Foster                                 Tel    [phone]


Forward looking statements in this press release including, without limitation,
statements relating to Galen's plans, strategies, objectives, expectations,
intentions and adequacy of resources, are made pursuant to the safe harbor
provisions of the U.S. Private Securities Litigation Reform Act of 1995.  These
forward looking statements involve known and unknown risks, uncertainties and
other factors that may cause the actual results, performance or achievements of
Galen to be materially different from any future results, performance or
achievements expressed or implied by such forward looking statements.  These
factors include, among others, the following:  Galen's ability to manage its
growth, government regulation affecting the development, manufacture, marketing
and sale of pharmaceutical products, customer acceptance of new products,
competitive factors in the industries in which Galen operates, the loss of key
senior management or scientific staff, exchange rate fluctuations, general
economic and business conditions, and other factors described in filings of
Galen with the SEC.  Galen undertakes no obligation to publicly update or revise
any forward looking statement, whether as a result of new information, future
events or otherwise.


This press release is for information purposes only and does not in itself
constitute an offer or an invitation to acquire or dispose of any securities.
Neither this press release nor the information contained herein is an offer of
securities for sale in or into the United States or in any jurisdiction in which
such an offer is unlawful. The Placing Shares which are the subject of the
Placing have not been and will not be registered under the U.S Securities Act of
1933, as amended (the "Securities Act"), and may not be offered or sold in or
into the United States absent registration under the Securities Act or an
exemption from registration. No public offering of the Placing Shares will be
made in the United States, the United Kingdom or elsewhere.


Appendix - Further details of the Placing


Terms and conditions


Members of the public are not eligible to take part in the Placing. This
communication is directed only at persons who (i) are outside the United Kingdom
or (ii) have professional experience in matters relating to investments falling
within Article 19(1) of the Financial Services and Markets Act 2000 (Financial
Promotion) Order 2001 (as amended) (the "Order") or (iii) are persons falling
within Article 49(2)(a) to (d) of the Order ("high net worth companies,
unincorporated associations etc.") (all such persons together being referred to
as "Relevant Persons"). This communication must not be acted on or relied on by
persons who are not Relevant Persons. Any investment or investment activity to
which this communication relates is available only to Relevant Persons and will
be engaged in only with Relevant Persons. This announcement does not in itself
constitute an offer for sale of any securities in Galen.


Persons who choose to participate in the Placing ("Placees") will be deemed to
have read and understood this announcement in its entirety and to be
participating on the terms and conditions contained herein, and to be providing
the representations, warranties, agreements, acknowledgements and undertakings,
in each case as contained in this announcement. In particular each Placee will
be deemed to represent, warrant and acknowledge that:


(a) the Placing Shares have not been and will not be registered under
the Securities Act, or under the securities laws of any state of the United
States, and are being offered and sold only (i) in the United States to
"qualified institutional buyers" (within the meaning of Rule 144A under the
Securities Act) ("QIBs") pursuant to an exemption from the registration
requirement of the Securities Act or (ii) outside the United States in
accordance with Rule 903 or 904 of Regulation S under the Securities Act
("Regulation S");


(b) the Placing Shares have not been approved or disapproved by the
United States Securities and Exchange Commission, any state securities
commission in the United States or any other United States regulatory authority;
and


(c) it will not offer, sell or deliver the Placing Shares sold in
reliance upon Regulation S within the United States or to, or for the account or
benefit of a US person (as defined in Regulation S) until 40 days after the
closing of the Placing (the "distribution compliance period"), and it will have
sent to any person to which it sells the Placing Shares during the distribution
compliance period a confirmation or notice setting forth the restrictions on
offers and sales of the Placing Shares within the United States or to, or for
the account or benefit of, US persons.


Details of the Placing


The Placing Shares are proposed to be placed by Hoare Govett through an
accelerated bookbuilding placing (which has been underwritten by Hoare Govett)
and will be made available to both new and existing eligible Relevant Persons
(as described above). The Placing will be conducted by Hoare Govett in
accordance with the terms and conditions set out in this announcement. The
Placing is not conditional on the completion of the disposal of the PDMS
business.


Principal terms of the bookbuilding process


Participation will only be available to Relevant Persons invited to participate
by Hoare Govett and who communicate their wish to participate in the
bookbuilding process to Hoare Govett in accordance with the instructions set out
below and who are able to participate in accordance with the terms and
conditions set out herein. Galen and Hoare Govett are each entitled to enter
bids as principal in the bookbuilding process.


The bookbuilding process will establish a single price (the "Placing Price")
payable by all Placees.  The Placing Price will be determined by Hoare Govett.
Bids submitted in the bookbuilding process should state the number or monetary
amount of Placing Shares which the institution wishes to subscribe for at either
the Placing Price or at prices up to a maximum price specified in the bid.


Hoare Govett reserves the right not to accept bids or to accept bids in part
rather than in whole. The acceptance of bids shall be at Hoare Govett's absolute
discretion.


The bookbuilding process will close no later than 4.30 PM (London time) on 2nd
December 2003, but may be closed earlier at the sole discretion of Hoare Govett.
Hoare Govett may, at its sole discretion, accept bids that are received after
the bookbuilding process has closed. Each participant in the bookbuilding
process agrees that bids will not be capable of rescission or termination by it.


How to participate in the bookbuilding process


An institution which complies with the terms and conditions set out above and
which wishes to participate in the bookbuilding process should communicate its
bid by telephone to its usual sales contact at ABN AMRO Equities (UK) Limited or
ABN AMRO Incorporated or to Lee Morton or Jeremy Thompson  at Hoare Govett (0207
678 1139/1760).


If successful, an allocation will be confirmed orally following the close of the
bookbuilding process and a contract note will be dispatched as soon as possible
thereafter stating the number of Placing Shares acquired by such Placee at the
Placing Price. Hoare Govett's confirmation will constitute a legally binding
commitment upon the relevant institution to purchase the number of Placing
Shares allocated to that institution at the Placing Price and otherwise on the
terms and conditions set out in this announcement.


Settlement is expected to be on 5th December 2003.


Confirmations


Each Placee, by accepting a participation in the Placing, agrees and confirms
that it has neither received nor relied on any information (other than the
information contained in this announcement or information which has been
published by the Company), representation, warranty or statement made by or on
behalf of Hoare Govett, Dr McClay or the Company and none of Dr McClay, the
Company or Hoare Govett will be liable for any Placee's decision to accept this
invitation to participate in the Placing based on any other information,
representation, warranty or statement. Each Placee acknowledges and agrees that
it has relied on its own investigation of the business and financial position of
the Company in accepting a participation in the Placing. Nothing in this
paragraph shall exclude the liability of any person for fraudulent
misrepresentation.


Hoare Govett is acting exclusively for Dr McClay in connection with the Placing
and no one else and will not be responsible to anyone other than Dr McClay for
providing the protections afforded to clients of Hoare Govett nor for providing
advice in relation to the Placing or any transaction or arrangement referred to
herein.


Ends


                      This information is provided by RNS
            The company news service from the London Stock Exchange
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