Says it has the full support of the Afexa board
Valeant Pharmaceuticals has agreed to buy fellow Canadian firm Afexa Life Sciences for approximately C$76m, or C$0.71 per share in cash.
This figure is higher than last month’s offer of C$0.55 per share by Paladin Labs, another Canadian company, headquartered in Montreal.
Afexa, a health-science company headquartered in Edmonton, Alberta, Canada, currently markets several consumer brands, such as Cold-FX and Coldsore-FX, and has annual revenues of approximately C$40m.
‘We are pleased to have the full support of Afexa's management team and board of directors for a transaction that we believe should deliver significant benefits to our customers, employees and shareholders,’ said Michael Pearson, chairman and chief executive of Valeant.
Paladin’s interim president and chief executive Mark Beaudet said: ‘When considering the Paladin offer and the Afexa board's recommendation, shareholders should examine Afexa's actual track record. Afexa has consistently failed to meet the targets that its management has provided to investors.’
Paladin Labs is now reviewing the terms of the Valeant bid and considering its options. The firm said it would make a further announcement once it had completed this review.
Valeant’s C$0.71 offer represents a premium of approximately 30% over Afexa's 30-trading day volume weighted average closing price on the Toronto Stock Exchange (TSX) and a premium of 49% over the closing price the day before the announcement of Paladin Labs’ bid on 29 August.
Under the terms of the deal with Valeant, Afexa has 30 days to continue looking for a better bid. Valeant has matching rights for any new bid that materialises and to be paid a C$3.75m termination fee if Afexa chooses an alternative proposal.