Paramount announces put options, new meeting date related to Chem Rx acquisition

By Lisa Kerner

Charlotte, N.C., Oct. 17 - Paramount Acquisition Corp. said Chem Rx Corp. principal stockholders Jerry Silva, the company's chief executive officer, and Steven Silva, chief operating officer of Chem Rx, entered into put option agreements with certain institutional investors.

As a result, Paramount has postponed its special meeting of stockholders to 10 a.m. ET on Oct. 22 from Oct. 17. Paramount shareholders will vote on the company's acquisition of Chem Rx.

The put option agreements provide each investor with an option to require the Silvas to purchase from it the shares of Paramount common stock that the investor purchases between Oct. 18 and the time of Paramount's special meeting, up to a maximum of 5,879,998 shares, a company news release stated. The put options may be exercised beginning nine months after the closing of the transaction with Chem Rx and ending on the first anniversary of the closing. The exercise price cannot exceed $6 per share.

It was previously reported that Paramount will acquire all of the outstanding capital stock of Chem Rx for $133 million in cash and will issue 2.5 million shares of Paramount common stock to the selling shareholders.

In addition, the selling shareholders will be entitled to an additional consideration of up to $12.5 million cash and 9 million shares of Paramount common stock upon the achievement of certain financial and share price milestones between 2007 and 2011.

Chem Rx is a Long Beach, N.Y.-based long-term care pharmacy. Paramount Acquisition is a New York-based special-purpose acquisition corporation.

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