MONTREAL – Paladin Labs Inc. says it will sweeten its takeover bid for Afexa Life Sciences Inc., if the Cold-FX maker’s two shareholder rights plans are waived by the Alberta Securities Commission.
Montreal-based Paladin (TSX:PLB) said Sunday it will increase its offer to acquire any and all of the issued and outstanding common shares of Afexa to 81 cents per share _ from 55 cents per share it offered in July.
The new offer has a total value of $74.5 million, up from $56.7 million.
On Friday, Paladin asked the ASC to cease trade Afexa’s two plans that are meant to defend shareholders against hostile bids. The commission is expected to announce its decision on Monday.
Paladin said the new offer will be made on Monday _ assuming the ASC issues the cease-trade order _ and will be open until 8 p.m. EST on Oct. 7.
Paladin said its “enhanced offer” represents a 14 per cent premium over the existing offer for Afexa (TSX:FXA) from a subsidiary of Valeant Pharmaceuticals International, Inc.(TSX:VRX).
Valeant made its $76-million bid in August.
Under the new offer, Afexa shareholders can chose to tender their shares for either 81 cents per share in cash or 0.0217 of a Paladin share for each Afexa share.
The share exchange ratio was calculated based on the closing price of Paladin shares on the TSX of $37.36 on September 23, 2011.
“The cash alternative is significantly higher and the share alternative gives Afexa shareholders the choice of continuing to have an interest in COLD-FX(R) and in the specialty pharmaceutical sector by accepting shares in Paladin, a diversified, profitable and rapidly growing company whose shares have significantly outperformed Afexa and the market generally over the past five years,” said Mark Beaudet, interim President and CEO of Paladin.
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