Kevin Van Paassen
Afexa Life Sciences Inc. , the company that makes and sells COLD-FX, has received a takeover offer from Paladin Labs Inc., marking what could be a rare all-Canadian pharmaceutical deal.
The two companies entered into exclusivity talks in mid-July, but ultimately broke their private negotiations off because they couldn't reach an agreement. Those talks started because Paladin had bought 15 per cent of the company on the open market, and Afexa wanted to hear what Paladin was willing to put on the table in terms of a deal.
COLD-FX is Afexa's main product, and Paladin argues that it fits well with its business strategy. Rather than being research-based, Paladin focuses on licensing different drugs, which gives the company the right to market them. Paladin likes that COLD-FX has good over-the-counter appeal, so it wanted to bring Afexa into its fold.
Paladin is offering Afexa shareholders $0.55 per share -- a 16 per cent premium to Tuesday's closing price -- and a 57 per cent premium to the price on the day before Paladin started buying up shares in the open market.
There is an odd twist in the deal. Typically, an acquirer will look to meet a minimum tender threshold. In this transaction, Paladin is looking for any and all shares.
Note: Edmonton-based Afexa used to be known as CV Technologies, but changed its name in 2009.
Tim Kiladze