Axis-shield Share Discussion Threads

[scobiebreasley] 14/8/2011 11:45

Axis-Shield investors split over Alere bid


Published Date: 14 August 2011
By Peter Ranscombe

SHAREHOLDER uncertainty is giving the board of medical testing kit company Axis-Shield confidence that it can fend off an unwanted bid from a US predator.
Alere, a New York-listed life sciences company, last week issued its offer to stakeholders at 460p a share, valuing the Dundee company at about £230 million.

Axis-Shield's management now has until 24 August to publish its defence document having rejected the US group's bid, saying it "fundamentally undervalued" the business and its prospects.

Chairman John Brown last week gave investors a taste of what will be contained within that formal defence, confirming that the firm is on course to launch its key lipids test before the end of the year.

Lipids - which are measured as an indication of heart and lung diseases - could be a key sector for the Scottish firm, with the market forecast to be worth $500m (£310m) by 2013, more than the red blood cell test sector in which Axis-Shield operates.

Key to the company's defence will be its Afinion machine - which can run several tests on a single sample - and which will run the forthcoming lipids test. Introducing the new test will put Axis-Shield head-to-head with current market leaders Alere and Abaxis.

Chris Glasper, an analyst at Brewin Dolphin, said: "We continue to believe the approach is opportunistic and is driven by Alere's concern over the competitive threat posed by Afinion to its Cholestech franchise in the US coupled with a dire trading performance from its health management division.

"The strategic value of Afinion in particular is what is at stake here. We continue to believe the true take out value of Axis-Shield should be above 550p."

Such an offer would value the firm - created in 1999 through the merger of Dundee-based Shield Diagnostics and Norway's Axis Group - at about £275m.

Brown has admitted that there may be a level at which a bid would be "sufficiently interesting to permit someone to indulge in discussions with us but we don't feel it's there at the moment". He refused to be drawn at what size of bid would hit the mark.

Shares in Axis-Shield closed up 11p on Friday at 478p, valuing the company at £239m, indicating that a higher offer may be possible. The stock has been a rare riser in a sea of red over the past fortnight amid the market turbulence.

Axis-Shield's share price jumped nearly 50 per cent to hit a ten-year high of 500p on 6 July, the day Alere made its informal approach public.

The US firm spoke to Axis-Shield's board in June but was rebuffed and so turned its bid hostile on 5 August.

Alere - formerly known as Inverness Medical - said its bid offered investors certainty in volatile markets.

But Sebastien Jantet, an analyst at Investec Securities, said: "We continue to view Alere's approach as having a sound strategic footing, but it looks to us like Alere is trying to take advantage of the current market turbulence to get Axis on the cheap.

"We await with interest Axis' detailed response to the offer and remain of the view that Alere will need to up its offer to secure Axis. We are also of the view that now that Alere has upped the ante, other players may also emerge."

[tratante] 13/8/2011 13:13

Instis selling to Alere "Invesco Asset Management and AXA Framlington sold part of their stakes." according to Herald Scotland.

Hopefully just keeping the bid alive rather than helping them get ASD for 460.

[scobiebreasley] 12/8/2011 17:15

'We're doing fine without Alere' says Axis-Shield chairman


Published Date: 12 August 2011
By PETER RANSCOMBE
BUSINESS CORRESPONDENT

AXIS-SHIELD chairman John Brown yesterday launched the medical testing kit maker's defence against a hostile takeover bid by saying the Dundee firm did not need a larger parent company to sell its machines.
The Scots life sciences veteran, who is joint-chairman of the Scottish Life Sciences Advisory Board, reiterated his directors' view that last Friday's £230 million takeover bid from New York-listed Alere "fundamentally undervalues" the company.


His comments came as Alere yesterday published its formal offer document to shareholders in the Scottish company.

Brown said Axis-Shield had already sold 10,000 of its Afinion machines - which can run several tests on a single sample - and a further 40,000 units of its cheaper Nycocard equipment, working with companies including Physician Sales & Services with its 750 sales staff in the US.

He told The Scotsman: "We have an excellent commercial strategy. To have 10,000 Afinion machines out there is an incredible performance.

"We can get our products out there - that's not a problem. In emerging markets, we're promoting our Nycocard machine. So we're doing pretty well at getting our equipment out there."

Brown admitted there may be a price at which Axis-Shield's board would enter discussions with its suitor but refused to be drawn on a specific figure.

He added: "The board is always aware of its responsibility (to shareholders]. There may be a value at which we feel it's sufficiently interesting to permit someone to indulge in discussions with us but we don't feel it's there at the moment."

Analysts have suggested Axis-Shield may be worth more than 550p a share, valuing it at £275m.

Axis-Shield's stock has been a rare riser in a sea of red over the past week. Having jumped by 50 per cent last month when an informal approach from Alere was made public, the shares have been holding their own in recent days amid the market turmoil.

Brown said: "We saw all our large investors after the announcement from Alere to put forward our case for the strength of Axis-Shield and that the offer undervalues the company. They seemed to appreciate our position and the fact the share price has stayed above the 460p offer indicates they agree with us."

Shares in Axis-Shield closed up 3.5p last night at 467p.

Brown confirmed the firm was still on course to launch its a lipids test, to measure cholesterol levels and other indications of heart and lung disease, before the end of the year.

He said the lipids market was forecast to be worth $500m (£310m) by 2013.

Massachusetts-based Alere was previously called Inverness Medical and sold its main site in the Highlands to Johnson & Johnson in 2001 for $1.3 billion.

[tratante] 12/8/2011 15:10

hotfinance, while I agree with you that ASD share price share price will increase in the long term, I am more concerned with the short term at the moment. Particularly in these difficult times I am anxious not to see a short-term profit melt away.

SP seems particularly strong today, just following the market up, or might there be another bidder about to emerge?

Not an easy call I agree.

[hotfinance14] 12/8/2011 10:18

I expect the bid do be rejected by shareholders and ASD to increase revenues and profits and therefore the share price over the future years.

[slaterlpj] 12/8/2011 09:47

I'm kind of with you tratante.
I already sold a chunk at the start of this above where we are now, and to preserve profit, I am seriously considering dumping the rest. There is not much more upside, even if there is another bidder, as the bid is unlikely to exceed 500/520 anyway.

Its a gamble, pure and simple.

Do you hold out for more, or do you sell, and hope for a complete rejection of the bids by the board, allowing you to buy back cheaper?

50:50 I think.

[jpjp100] 12/8/2011 09:34

First Eagle upping its exposure a touch again in today's announcement...

[jpjp100] 12/8/2011 09:07

not necessarily tratante

the price could hold up through and after 25th in expectation of a higher offer

I can't think of a more sensible response by the ASD Board at this stage of proceedings

[tratante] 12/8/2011 09:00

This is getting tricky.

Do I assume correctly that Alere can't increase their bid before they know the share holder's response to the current offer? If that's the case:

the share price is currently above the Alere's offer so no reason not to sell now if the takeover is likely to be accepted.

If the bid is rejected, and there has not been a counter offer from another co in the meantime, the price is likely to fall at least in the short-term. So another reason to sell - and buy back cheaper if you think another bid will emerge from Alere later.

seems to me the only reason to continue to hold is if a counter offer is likely before 25 Aug.

does this make sense? thoughts anyone.

[nick100] 12/8/2011 07:05

RNS Number : 2436M

Axis-Shield PLC

11 August 2011

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF THAT JURISDICTION

(For immediate release)

11 August 2011

Axis-Shield plc ("Axis-Shield" or the "Company")

Statement in response to announcement by Alere AS Holdings ("Alere")

The Board of Axis-Shield (the "Board") notes the announcement made today by Alere that it has posted today its offer document containing the full terms and conditions of its cash offer to be made for the entire issued and to be issued ordinary share capital of Axis-Shield at 460 pence per share (the "Offer") to Axis-Shield shareholders.

In accordance with Rule 30.2 of the City Code on Takeovers and Mergers, the Board will write to Axis-Shield shareholders to set out its position in further detail by no later than Thursday 25 August 2011. The Board, after consultation together with its financial and legal advisers, continues to believe that the Offer fundamentally undervalues the Company and its future prospects. The Board has full confidence in the Company's strategy and management to continue to deliver significant shareholder value.

As previously indicated, Axis-Shield will announce its interim results on Wednesday 24 August 2011.

[dlem] 11/8/2011 12:54

Yesterday I received a secure message from online broker asking me to confirm if I wish to accept the £4.60 bid.

"Terms: TAKEOVER. Shareholders have the opportunity to accept a cash offer by Alere AS Holdings at GBP 4.60 per share held. If you would like to accept the offer, please elect online where available or else notify us in writing by secure message or letter no later than 5pm on 23 August 2011."

The timing of the bid (a day into a close period, with a deadline that is a day before the end of the close period) is requiring shareholders to make a decision prior to the "Company's Interim Results expected to be announced on 24 August 2011" and possibly before the company can do much to release a counter argument.

The directors are prevented from demonstrating their confidence in the company by buying shares during a close period.

Alere appear to have mopped up all they can in the market at or under the £4.60 price. I may be wrong, but I understood that the minimum a bidder must offer all shareholders is the highest price they paid in the preceding 12 month period.

I would expect that their discussions with institutional investors will establish the price that they will need to pay to get anywhere.

I hope that the board will put forward a detailed counter argument to shareholders, but I am concerned that its next opportunity to provide a full update may be a day after the bid deadline.

In my opinion the company should if possible bring forward the date of the Interim Results, so that shareholders can make a better informed decision.

[hotfinance14] 11/8/2011 09:22

A lot of buys this morning...one being 60k of shares.

[hotfinance14] 10/8/2011 13:32

Its at 29.9% they have to put a bid in.

[tratante] 10/8/2011 13:07

at what stage do they have to put the bid to shareholders. Are they likely to increase the current bid before it is rejected? Sorry if I am showing my ignorance.

[hotfinance14] 10/8/2011 12:42

They must be putting in another bid soon.

[9degrees] 10/8/2011 12:30

rns alere now hold 9.09%

[tratante] 09/8/2011 17:23

Been away while all this is happening. What's the timetable for the next steps? Has a ballot been announced yet?

[maddox] 09/8/2011 16:51

Hi hf,

Totally agree, 460p is a give away price and there is no way even with competitive bidding the price will reflect true worth at this time.

[hotfinance14] 09/8/2011 15:57

Slater...but in two years time I can see ASD's share price being about £8-£10...thats why I dont want the bid to go through.

[slaterlpj] 09/8/2011 14:41

If your right and the top bid is only 500, then all there is to look forward to is an upside of another 8%.

I'm thinking now that maybe it's time to take the rest of mine at 460 (or as near as I can get) and buy into the current market turmoil. Some have dropped very nicely in the last few days, and I think the mayhem, might just take things even lower.

Just as well Alere came along when they did. I dread to think where the ASD share price might be at the mo without a bid.

On the other hand that would have presented a good buying opp here too.

Seems like a win win for a change.

[hotfinance14] 09/8/2011 14:13

I am confident there will be a higher bid of 500p.

[slaterlpj] 09/8/2011 13:29

Ah your alive Hotfinance. Glad to have your input :)

So how much to take out ASD then? How interesting do you think it will get?

[hotfinance14] 09/8/2011 11:53

ASD is a big threat to Alere's market so this could get very interesting.

[jpjp100] 08/8/2011 08:14

I still want ASD to stay independent for now. It isn't big enough yet to be a truly worthwhile acquisition for, say, JnJ.

That makes Alere's bid quite smart really, it knows the technology well and can make a decent fit of the business with its own, without overstretching. If a big player like JnJ was interested enough to enter the bidding process, it is unlikely that Alere could either make a compelling enough case to convince ASD shareholders to sell, or come up with enough poke to outbid JnJ.

In the longterm ASD is destined to be bought out, I really do wish it was when the tests / platform were even more established than they are now - maybe 2 more years would get there.