September 17, 2014 / 2:13 AM / 3 years ago

UPDATE 2-Endo's $2.2 bln offer could complicate Auxilium Pharma's QLT deal

3 Min Read

(Adds details, CEO quote; updates shares)

By Shailaja Sharma

Sept 16 (Reuters) - Endo International Plc made an unsolicited offer to buy Auxilium Pharmaceuticals Inc for about $2.2 billion, which analysts said could complicate Auxilium's buyout of Canadian eye drug maker QLT Inc .

Endo Chief Executive Rajiv De Silva said the specialty healthcare company sent its offer to Auxilium on Friday but had not received an official response.

Auxilium did not respond to an email query and phone calls. The Chesterbook, Pennsylvania-based company said in June that it would buy Vancouver-based QLT in an all-stock deal in order to move its headquartersto lower-tax British Columbia.

Auxilium said it expected that buyout to be completed in the fourth quarter of 2014.

Endo's offer of $28.10 per share in cash and stock represented a premium of 30.6 percent to Auxilium's Tuesday closing price of $21.52 on the Nasdaq.

Auxilium's shares were up 37 percent at $29.52 after the bell, indicating that some shareholders expected a higher offer.

"Our offer is for Auxilium only," De Silva said during a conference call late on Tuesday. He was responding to analysts who asked if the deal could throw into doubt Auxilium's takeover of QLT.

"We would leave it up to Auxilium's management and its board to come to its own conclusions on how they view our transaction versus the transaction with QLT," De Silva said.

Shares of Endo International, formerly known as Endo Health Solutions, were trading 4.3 percent higher at $68 after markets closed.

Endo itself moved overseas to lower its taxes, shifting its base from Malvern, Pennsylvania to Dublin last year when it acquired Canadian drugmaker Paladin Labs.

Endo said it plans to expand its men's healthcare products business by gaining access to Aulixium brands such as the target company's Xiaflex drug. Auxilium also has at least a dozen other U.S. Food and Drug Administration-approved urological, orthopedic and men's health products.

Xiaflex is marketed in the United States to treat men with curvature of the penis, a condition known as Peyronie's disease.

The drug is also being evaluated for use in frozen shoulder syndrome and is approved to treat Dupuytren's contracture, a progressive hand disease that affects a person's ability to use his fingers. Last month, Auxilium said a midstage study showed that two doses of the drug smoothed cellulite.

De Silva said Endo would invest in Xiaflex to expand the brand's use for other treatments.

Auxilium also makes testosterone drugs, including Testim gel, Testopel pellets and Striant.

Endo, whose men's healthcare products include testosterone replacement therapy Aveed, said it intends to fund the transaction through cash on hand and debt financing.

Endo said Citigroup Inc is serving as its financial adviser, while Sullivan & Cromwell LLP is serving as its legal adviser. (Reporting by Shailaja Sharma in Bangalore; Editing by Don Sebastian and Jonathan Oatis)

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