InSite Vision terminates QLT bid, plans to merge with Sun Pharma

InSite Vision terminated a merger agreement with QLT and accepted a merger bid from Sun Pharmaceutical.

The all-cash acquisition is valued at $0.35 per share, or approximately $48 million in aggregate equity value, on a fully diluted basis, according to a press release from InSite.

InSite’s board of directors determined that the unsolicited offer from Sun Pharma was a superior proposal, according to a press release from QLT. Under the original merger plan announced in June, QLT proposed to acquire InSite for $0.178 per share in an all-share transaction.

“QLT then had the option to negotiate with InSite a possible amendment to the terms of the Amended and Restated Merger Agreement,” the release said. “QLT was unwilling to provide an offer that InSite indicated it would deem superior to the Sun proposal. As a result, on September 15, 2015, InSite notified QLT that InSite was exercising its right to terminate the Amended and Restated Merger Agreement in order to enter into an agreement with Sun.”

According to the release, InSite paid a termination fee to QLT totaling nearly $2.7 million, plus all principal and interest owed by InSite to QLT under a secured loan advanced in connection with the merger agreement.

“The QLT board recognizes that this is the second transaction in the past 12 months that did not come to fruition, with both offers trumped by proposals from large pharmaceutical companies that were willing to pay significant premiums to acquire these assets. In both cases, the tremendous value of our proposals was validated by subsequent premiums
75% and 100% over our pre-agreement values for Auxilium and InSite, respectively,” Jason M. Aryeh, chairman of the board of QLT, said in the release.

Sun Pharma’s acquisition of InSite is expected to close in the fourth quarter, according to the InSite release.