Paladin to buy Labopharm for $20.4m

Labopharm, a Canadian biotech company specializing in controlled-release drugs, has agreed to be bought by Paladin Labs, ending a months-long search for a suitor.Paladin said it would pay 28.57 Canadian cents a share in cash for Labopharm, valuing the company at about C$20 million ($20.4 million), a 68 percent premium over its closing share price of 17 Canadian cents. Labopharm shares jumped 62 percent on the Toronto Stock Exchange to 27.5 Canadian.“The board of directors has concluded that this all-cash offer, which is at a significant premium to the trading price of Labopharm’s shares, is the best way to maximize shareholder value,” Labopharm Chairman Santo J. Costa said.The company said earlier that its joint venture with Gruppo Angelini, Angelini Labopharm LLC, would eliminate its sales force to reduce costs.Labopharm has struggled in recent months and was forced to delist its common shares from Nasdaq in June after failing to maintain a minimum bid price of $1 a share and a market value of listed securities of $50 million.  In March, it replaced its chief executive, cut its work force and said it was in the market to explore strategic options. From / Gulf Today