MISSISSAUGA, Ontario—Afexa Life Sciences Inc. has learnedthat sometimes, being picky pays off. The health science company turned down aproposal from Paladin Labs Inc. just last week, a $50 million takeover bid thatAfexa's board of directors said significantly undervalues the shares of thecompany.
On Aug. 30, the company announced that its board unanimouslyapproved an offer from Valeant Pharmaceuticals International Inc. to acquireAfexa for approximately $77.5 million.
J. Michael Pearson, chairman and chief executive officer ofValeant, said in a press release, "Afexa's strong franchise of consumer brands,including COLD-FX, Canada's leading over-the-counter cold and flu treatment,will be a solid addition to our developing OTC product portfolio in Canada."
Under the terms of the companies' agreement, Afexa'sshareholders will receive $0.724 in cash per share of common stock they hold,which represents an approximately 30 percent premium to Afexa's 30-trading dayvolume weighted average closing price and a 49 percent premium over its closingprice of $0.476 the day before Paladin's proposal was announced.
The transaction is structured as a takeover bid, and Afexahas a 30-day "go shop" period during which it is permitted to solicitnegotiations for competing proposals that might present a superior offer.