Valeant out-bids Paladin with C$76 million cash bid for Afexa

Acquisitive Canadian drugmaker Valeant Pharmaceuticals International (TSX: VRX) says that it has entered into an agreed deal to acquire Afexa Life Sciences (TSX: FXA) for around C$76 million ($76.9 million), or C$0.71 per share in cash, trumping by around 29% a recent offer of C$0.55 a share from fellow Canada-based Paladin Labs (TSX: PLB), which is also in the throes of buying Labopharm (The Pharma Letter August 22).

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 about C$40 million. The company’s board of directors, after receiving the unanimous recommendation of its special committee, has approved the agreement and unanimously recommends that Afexa's shareholders tender their common shares.

The C$0.71 offer represents a premium of some 30% over Afexa's 30-trading day volume weighted average closing price on the Toronto Stock Exchange and a premium of 49% over the closing price the day before the announcement of the unsolicited bid by Paladin. The agreement also represents a 49% premium to the alternative share consideration offered under Paladin bid (based on Paladin's closing share price on the TSX on August 29, 2011), according to Valeant.