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Aviragen, Vaxart revise deal terms amid criticism of merger

Aviragen Therapeutics Inc. and Vaxart Inc. agreed to amend the terms of their merger to increase value for Aviragen stockholders amid mounting criticism over the proposed deal.

Under the revised terms, Aviragen stockholders would own 49% of the combined company, up from 40% in the previous deal. This represents a 22.5% increase in the ownership stake that Aviragen stockholders will have in the combined company.

The amended agreement has been unanimously approved by the boards of both companies.

In January, an investor group comprising Digirad Corp., East Hill Management Co. LLC and Thomas Clay urged Aviragen shareholders to reject the proposed deal, calling the deal process "flawed."

The group insisted that the arrangement as it stood was not in the best interest of Aviragen stockholders.

Proxy advisory company Glass Lewis & Co. recently recommended that Aviragen shareholders vote against the deal. Glass Lewis & Co.'s opposition came on the heels of the same recommendation from another proxy adviser Institutional Shareholder Services Inc.

The Alpharetta, Ga.-based company urged its stockholders to vote in favor of the arrangement. The stockholders are now scheduled to vote on the merger at a Feb. 9 special meeting.

Stifel Nicolaus & Co. Inc. is acting as financial adviser to Aviragen, and Dechert LLP is serving as legal counsel to Aviragen. Cooley LLP is serving as legal counsel to Vaxart.