Auxilium Pharma Rejects Endo's Buyout Offer, Backs Merger Deal With QLT

(RTTNews) - Auxilium Pharmaceuticals Inc. (AUXL) said Monday that its board of directors has rejected the unsolicited $2.2 billion proposal from Ireland-based specialty healthcare company Endo International plc (ENDP, ENL.TO), noting that it is not a superior offer and "significantly undervalues" Auxilium.

The Chesterbrook, Pennsylvania-based company's board has reaffirmed its recommendation that its stockholders vote in favor of the company's merger deal with Canadian eye drug maker QLT Inc. (QLTI, QLT.TO).

Auxilium added that under the terms of its merger deal with QLT, it maintains the right to engage in talks with Endo and other third parties, subject to certain conditions in the merger agreement.

Last Wednesday, Auxilium had said it will carefully review the unsolicited buyout offer it received from Endo. The company also said it has adopted a one-year stockholder rights plan, commonly known as a poison pill, effective September 15, due to the unsolicited offer from Endo.

Endo's non-binding proposal is to acquire Auxilium's outstanding shares for $28.10 per share in cash and stock. The bid represents a 31 percent premium to Auxilium's closing price on September 16.

Auxilium and QLT said in late June 2014 that they have entered into a definitive agreement under which Auxilium plans to merge with QLT. Under the deal, a wholly-owned subsidiary of QLT will be merged into Auxilium. QLT will remain incorporated in British Columbia, Canada , and will be renamed "New Auxilium."

Shareholders of Auxilium will receive 3.1359 QLT shares for each Auxilium share, subject to certain adjustments. On completion, Auxilium shareholders will own about 76 percent of the combined entity on a fully diluted basis, and current QLT shareholders will own the remaining 24 percent.

AUXL closed Friday's trading at $31.14, up $0.02 or 0.06 percent on a volume of 3.22 million shares.