The board of Auxilium Pharmaceuticals Inc. has adopted a “poison pill” shareholder rights plan to ward off a hostile takeover after Endo International PLC announced an unsolicited offer worth about $1.41 billion for its fellow drugmaker.
Shares of Auxilium soared Wednesday before markets opened and after it said it adopted the one-year plan “to ensure that the (board) remains in the best position to perform its fiduciary duties and to enable all Auxilium stockholders to receive fair and equal treatment.”
Auxilium also said it would carefully review the Endo proposal.
Under the plan, stockholders will receive a right that essentially entitles them to buy additional shares. That right will be triggered if a person or group accumulates a stake of 15 percent or greater in the company at a price that the board deems to be not in the best interest of Auxilium and its shareholders.
Endo announced on Tuesday a cash-and-stock bid that values Auxilium at $28.10 per share. Dublin-based Endo said the two companies have complementary products and added that there are significant opportunities for savings.
Auxilium, based in Chesterbrook, Pennsylvania, is struggling with reduced sales of its testosterone gel Testim and said this month that it would cut about 190 jobs, or 30 percent of its workforce, as part of a plan to save $75 million per year.
In June, it announced plans to combine with Canadian eye drugmaker QLT Inc. in an all-stock deal worth about $345 million that is expected to close in the fourth quarter. The companies characterized that deal as a merger, and it is structured so that QLT is technically the acquiring company even though Auxilium shareholders will own a majority stake in the combined company.
Date: September 17, 2014
Source: Associated Press