Valeant emerges as Afexa's $76M white knight

Sorry, Paladin Labs. Valeant Pharmaceuticals ($VRX) has muscled its fellow Canadian drugmaker aside to strike a buyout deal with Afexa Life Sciences. Valeant's white-knight bid is 71 cents per share, or about $76 million, some 29% higher than Paladin's 55-cent offer. And it gives Afexa 30 days to seek out even better offers.

Valeant has an option to match any higher bid or take a $3.75 million termination fee, the Vancouver Sun reports. The company has been meeting with Afexa management to review its product offerings and pipeline, CEO Michael Pearson said. "What we came up with was what we believe to be a fair price that will reward Afexa shareholders but also reward Valeant shareholders," Pearson told the Sun, adding Valeant proposed the 30-day shopping period to avoid a potential auction or bidding war.

Pearson says Afexa's Cold-fX brand would augment its own nascent consumer-drug portfolio. Valeant can launch Cold-fX and Afexa's other products in markets outside Canada, "and that will create value that other companies, or Paladin, wouldn't be able to achieve," Pearson said.

Asked about a counterbid, Paladin maintained that Afexa isn't worth more than 55 cents a share. But Afexa Chairman Bill White said that he's seen "a lot of interest in the company. People realize that [Afexa] is worth higher value than what the hostile bid from Paladin was, so that generated interest."

- read the release from Valeant
- check out the Sun's story

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