Auxilium Pharma To Review Endo's Unsolicited Offer; Adopts Poison Pill

(RTTNews) - Auxilium Pharmaceuticals, Inc. (AUXL) said Wednesday that it will carefully review the $2.2 billion unsolicited buyout offer it has received from specialty healthcare company Endo International plc (ENDP, ENL.TO).

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.

Auxilium confirmed that it received a non-binding proposal from Ireland-based Endo to acquire the company's outstanding shares for $28.10 per share in cash and stock. The bid represents a 31 percent to Auxilium's closing price on September 16.

Auxilium and Canada-based biotechnology company QLT Inc. (QLTI, QLT.TO) 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.

Auxilium said that in accordance with its existing merger agreement with QLT, its board of directors will carefully review all aspects of the Endo proposal.

The company added that its board is not withdrawing, modifying, withholding, changing or qualifying its recommendation with respect to the merger deal with QLT, or proposing to do so.

Auxilium said its board has unanimously adopted a one-year stockholder rights plan, effective September 16, and declared a dividend distribution of one preferred share purchase right on each outstanding share of Auxilium's common stock. QLT has consented to the adoption of the poison pill.

Under the plan, Auxilium stockholders of record at the close of business on September 29, 2014 will receive one right for each share of Auxilium common stock held by them on that date.

Initially, these rights will not be exercisable and will trade with the shares of Auxilium common stock. If the rights become exercisable, each right will entitle stockholders to buy one one-hundredth of a share of a new series of junior participating preferred stock at an exercise price of $100 per right.

The distribution of the rights is not taxable to stockholders, and the plan is scheduled to expire on September 16, 2015, unless the rights are earlier redeemed or exchanged by Auxilium.

Auxilium said that its stockholders are not required to take any action to receive the rights distribution. Until the rights become exercisable, they will trade with the shares of Auxilium's common stock.

The company noted that the poison pill will not have an impact on its reported earnings per share and will also not change the manner in which Auxilium's common stock is currently traded.

In December, U.S. FDA approved the expanded use of Auxilium's Xiaflex as the first drug to treat men with abnormal curvature of the penis - a condition known as Peyronie's disease.

AUXL is trading at $30.47, up $8.95 or 41.59 percent on a volume of 8.48 million shares.

ENDP is trading at $67.51, up $2.34 or 3.59 percent on a volume of 2.93 million shares. QLTI is trading at $5.40, down $0.80 or 12.90 percent on a volume of 349,255 shares.