Drug maker seeks to block competitor’s inversion
Pharmaceutical company, Endo International, which struck an inversion last year and reincorporated in Ireland, tries to stop an inversion by Auxilium Pharmaceutical, a smaller rival.
Endo made on Tuesday an unsolicited offer to buy Auxilium for $28.10 a share in cash and stock, thing that gave a value of $2.2 billion to the company.
In case this offer is completed then a possible agreement between Auxilium and QLT to merge is out of the question.
Endo acquired Paladin Labs, a Canadian drug maker, last year. But instead of moving to Canada, Endo opted to redomicile in Ireland. This movement frustrated US lawmakers who try to deal with eroding the corporate tax base.
Endo approached Auxilium about a deal in recent weeks but could not persuade Auxilium’s board to abandon its deal for QLT. As a result, Endo opted to make its bid public, giving Auxilium shareholders a chance to review its offer.
However, if Auxilium walks away from the QLT deal, it would have to pay a break fee of about $27 million. But for Endo, that is a small price to pay to acquire Auxilium, which has a promising pipeline of drugs.
“Endo’s proposal would provide Auxilium shareholders a substantial premium and immediate cash value for their investment in Auxilium, as well as the opportunity to participate in the upside potential of a leading global specialty health care company,” Rajiv De Silva, the chief executive of Endo, said in a statement. “We believe this compelling strategic combination would result in and create benefits for both Endo and Auxilium shareholders, as well as for patients, customers and employees.”
Source: NYT
