If nothing else, the hostile takeover bid for Salix Pharmaceuticals launched by Axcan Pharma has been good for Salix stock.
Very good — as in a 40 percent jump.
With its stock now selling well north of $10 a share – $3 more than just two weeks ago — the Salix board issued a lengthy statement Wednesday evening dismissing the $203 million Axcan bid. Salix (Nasdaq: SLXP) closed at $10.33 on Wednesday.
The board “has unanimously determined” that Axcan’s offer of $8.75 a share made on April 10 “is grossly inadequate and not in the best interests of its stockholders.”
Wachovia Securities, which is acting as an independent financial advisor for Salix, also said “the Axcan offer is inadequate from a financial point of view,” said Bob Ruscher, the executive chairman of the Salix board.
The two companies have had discussions in the past about cooperation, given that both are focused on intestinal treatments. But Salix rejected takeover discussions, leading Axcan, which is based in Canada, to make a public hostile bid on April 10. At the time the share price offered did exceed the street price of $7.29. But within the past year, Salix stock has traded as high as $17.95 a share.
Salix adopted a poison pill defense earlier this year.
Citing growing sales for its ulcerative colitis drug Colazal and the expected FDA approval of a drug for the treatment of intestinal infections, Ruscher said even the current street price didn’t reflect the true value of Salix.
“Despite the fact that Salix is in its strongest position ever to accomplish its mission, this strength is not even remotely reflected in our stock price,” he said.
Salix also is pursuing a third drug for delayed release treatment of ulcerative colitis.
Axcan has vowed to pursue the acquisition.
“We are resolute in pursuing this course, but continue to believe that a negotiated agreement is in the best interest of your stockholders,” Leon Gosselin, head of Axcan, said in a letter to Salix stockholders.