Axis-shield Share Discussion Threads

[soulman] 25/9/2011 08:37

I agree that if the bid is unsuccessful then the share price must surely drop - by how much is the question/worry? I was tempted on Friday to sell half my holding because of this concern. However I didn't because I can't help feeling that Alere are trying to get ASD on the cheap (who can blame them)by using the current general market weakness to make their offer look generous and to make investors nervous. Also having held ASD shares for some considerable time I don't want to sell now and then see the share price much higher in a few years time. I know ASD have promised much over the years and the share price has often got ahead of itself but the financial numbers keep getting better and I have a feeling in my bones that during the next few years one's patience could finally be rewarded.

[slaterlpj] 24/9/2011 16:29

Ah but that was due to premature hype. The share price fell sharply after that. That's the worry if the bid fails to go through. But I agree, now ASD has moved on, and a 400 plus share price is justified.

[soulman] 24/9/2011 08:56

Whilst it is true that the share price has not been above 4.60 for .c 10 years it is also true that the share price almost reached 4.50 a few years ago.

[slaterlpj] 23/9/2011 22:01

"Nor do we see any point in doing anything before 10 October, the next closing date."

Yup, that makes sense.

[cal57] 23/9/2011 18:29

Investec has kept its buy rating on Dundee-based diagnostics firm Axis-Shield, following yesterday's statement by potential buyer Alere urging shareholders to accept its 460p-a-share bid.

"Whilst Alere makes some sensible points, we do not agree with all the points it is making and we remain of the view that whilst Alere is serious about acquiring Axis, it is trying to take advantage of current market conditions to buy Axis on the cheap," said Investec analyst Sebastien Jante.

The broker has suggested that shareholders should sit tight and do nothing at least until the 26 September, "the last day Alere can revise its offer under the current timetable. Nor do we see any point in doing anything before 10 October, the next closing date."

Investec keeps a 530p target.

[edgar3] 23/9/2011 12:45

You're having a flipping laugh, slater ......

[slaterlpj] 23/9/2011 11:58

Ah well, in for a penny, in for a pound now.

Hold tight everybody.

Now if you really famncy a gamble, buy as the price falls, and hope for the bid to push through with an increase.

[slaterlpj] 23/9/2011 11:09

Isn't this fun :)

[hotfinance14] 23/9/2011 10:58

ASD's lipid assay is a big threat to Alere....remember that.

[stuffee] 23/9/2011 10:38

Edgar3, DLEM et al

Alere have NOT declared 460p offer as final.

They can still increase but this has to be announced and made to shareholders by Monday 26th.

Yesterday's announcement was interesting for what it did not say, namely there was no formal statement that 460 would not be increased. It is also interesting that Alere have been attempting to meet Axis board to negotiate, which certainly implies they are prepared to pay a little more. Obviously yesterday's near 5% market fall hasn't helped prospect for any increase, but Alere must worry their offer of 460 could fail, especially if there is slight market recovery over next two weeks.

For the first time, Alere were not sweeping up any available stock in market yesterday. I guess they feel great volumes were not available and they'd like to see share price soften a bit per encourager les autres.

Hang on for Monday, but acknowledge earlier price expectations must have been dampened by market fall.

[troutisout] 23/9/2011 10:14

Sorry that was confusing, I meant the drop would be £1, back to around £3.55.

Trying to say, weigh up the possible upside, against possible downside.

[hotfinance14] 23/9/2011 10:11

I think the share price would drop to about £4...nothing like £1.

[troutisout] 23/9/2011 09:43

Just a few thoughts from an onlooker,
The reason Alere are buying at £4.60 is that is where their offer is and institutions look to be selling to them at that price (I assume 1m wasn't a PI?).
Alere, if their offer is rejected will have to walk away and I believe will be locked out from any further advances for a period of time. I don't know whether this precludes them from buying in the market during this time?

Alere aren't into investing on the stock market, they want to buy ASD, they see value here and with their size the value they see will be completely different to the value of ASD without Alere, so don't get too complacent with Alere's perceived value of ASD compared with what the market will value ASD at.

Importantly there haven't been any other bidders come to the fore and also the current market is horrendous, this strengthens Alere's hand and although there is an element of poker going on, they do have the cards.

I have shares in a Company that had an approach by Inverness (now Alere), it was reputed to be an all share offer and the share price rose to about 80% of the offer price, it came to nothing and the morning that news was announced the share price opened back where it started and hasn't ever come close again to the price it got to in the last 4 years.

So be careful, the price is at a good premium to where it was, if you missed the op to sell a few at circa £5 then it is worth stepping back and thinking about your holding here. If Alere increase their offer it is not likely to be much more than it is now, if they pull out the share price is likely to tumble, the markets are awful at the moment, but will give up all sorts of bargains, would taking some cash out of ASD now be a bad thing? I only say this because there won't be a warning if Alere drop it, it will be too late to sell then and if the share price drops as is likely, you will rue the missed opportunity, even if it is to buy back some ASD at a lower price.

Step back and weigh up the pros and cons, look at the risk/reward. If there was a higher offer how much higher? 40p, 60p, 80p??? If the offer is pulled what is the likely drop in SP? I think it will go back to where it started, so over £1 (edit - drop of £1 from current level), look at the markets and current turmoil, would it be better to be in cash and look to pick up bargains (even a lower priced ASD)?

Don't get tunnel vision about possible riches, but most importantly take a deep breath, step back and decide what is best for you!!! and act while you can.

Good Luck to all holders, I know most investors would love to be in your position at the moment, so make the most of what you decide!

Trout.

[dlem] 23/9/2011 09:40

Alere have used a lot of words "not to say" that they will not increase their offer. In my opinion, there is a subtle difference between " Alere will remain disciplined on price and will only pursue acquisitions at a price which would provide an appropriate return to Alere shareholders" and "this is our final offer!" A lot was said about risk to Axis shareholders but nothing about risk to Alere.

Perhaps they were taking the opportunity to condition shareholders on a bad day for the markets, to a marginally increased offer next week. Institutions hold the majority of Axis shares and they will be fully briefed on value and potential value.

The question is what price provides and appropriate return for Alere, given the potential impact of the strategic threat that Axis makes to their current business. Alere's proposed alternative share buyback plan, is a defeatist alternative for a growth driven business and a strange thing to fund from debt. The effectiveness of a share buyback would be lessened if the competitive threat from Axis erodes Alere's future income.

"Dear Bank, we would like to borrow loads of money for low risk asset backed synergistic acquisition that will eliminate a significant competitive threat to us and provide us with an instant global development opportunity. Please don't impose any banking covenants on the loan because if we fail, we going to buy back some of our own shares to appease shareholders and support our share value while the target continues to impact negatively on our future revenues. The shares will be cancelled, so debt will increase without increasing assets, but don't worry because we can always issue more shares to repay the debt if things go wrong. We are very grateful for your support and flexibility and we will be back in touch next time we find another expensive acquisition opportunity to miss out on."

[edgar3] 23/9/2011 09:02

Till Monday then, thanks Hf.

You will note that Alere say they are content to acquire in the market at low prices. This doesn't really square with their 1M share purchase at £4.60 a few days ago.

Logically, they would only do this if they believed that was a 'cheap' price, ie: they knew the price woudld otherwise increase. If they weren't going to increase their bid, why not wait till the price drops (which as HF points out, they now confidently predict)?

Just a few thoughts. Finding it difficult to concentrate at work ....!
Edgar3

[slaterlpj] 23/9/2011 09:01

It's all a bit smoke and mirrors.

It's not easy once so many words get bandied around and printed, to see the facts from the chaff.

Alere are hinting that the value in ASD (what ever that is) will fall, when all that will fall is the share price (the percieved value).

True, if the bid fails and the share price falls, we have all lost the opportunity to get out with a profit and buy back in later. But time should bring the share price back to at least where it was prior to the bid, and likely back to 400 plus anyway.

The bid has established a new floor for the ASD share price IMO, and when the markets in general stabilise, it should reach that floor.

The wider current market chaos has been a gift for Alere. They can make a lot of hay from it. But it's still smoke and mirrors.

I agree, if ASD is such a bad bet, why do Alere continue to persue it?

[hotfinance14] 23/9/2011 08:42

In City News 'Alere have stated ASD shareholders will see a significant drop in value if a takeover is not accepted.Alere has until Monday to raise its offer'.

[edgar3] 23/9/2011 08:39

Apologies Slater, you had clearly seen the RNS last night ....

This is squeaky bum time.

As I understand it from Stuffee, the bid won't be increased from now. Either it fails (and the share price drops) or there will be frantic talks between the Board and Alere to try and agree a price.

I imagine that enormous pressure will be put on the Board by some of the institutional shareholders - the last thing they will want to see will be a drop in their holdings. Am I right?

Any predictions hereon in?

Edgar3

[jpjp100] 23/9/2011 07:33

Its the right thing for Alere to do, it addresses every possible strand of ASD's defence with rigour

In fact, having read that, one might be moved to ask why Alere wants to buy such a crock at such a premium!

;-)

[edgar3] 23/9/2011 07:16

NO INCREASE IN OFFER
22 September 2011
CASH OFFER
BY
ALERE AS HOLDINGS LIMITED ("ALERE AS HOLDINGS" OR THE "OFFEROR")
A WHOLLY-OWNED SUBSIDIARY OF ALERE INC. ("ALERE")
FOR
AXIS-SHIELD PLC ("AXIS-SHIELD" OR THE "COMPANY")
STATEMENT REGARDING AXIS-SHIELD
Since Alere's Rule 2.4 announcement on 6 July 2011, Axis-Shield has released a number of announcements,
including its Interim Results for the six months ended 30 June 2011 (the "Interim Results") and its shareholder
circular (the "Defence Document"), none of which, in Alere's opinion, have revealed any material new information.
Alere is disappointed that neither the Board of Axis-Shield, nor its advisors, have held any discussions or sought to
engage with Alere, since the date that Alere announced its firm intention to make an offer for Axis-Shield.
The Board of Alere believes that the terms of the cash offer made by Alere AS Holdings to acquire the entire issued
and to be issued share capital of Axis-Shield of 460 pence per Axis-Shield Share (the "Offer") represents a
compelling value proposition with a high degree of certainty.
Between 6 July 2011, being the day Alere announced a possible offer for Axis-Shield and 21 September 2011, being
the latest practicable date prior to publication of this Announcement, equity markets have been subject to significant
volatility with Axis-Shield's key industry peers trading on average approximately 21 per cent. lower.
Alere believes that Axis-Shield's share price is trading at current levels primarily as a result of the Offer and not due
to underlying fundamentals.
The Offer represents a substantial premium of approximately 37 per cent. to the Closing Price of 335 pence on 5
July 2011, being the last Business Day prior to the announcement by Alere of a possible offer for Axis-Shield and a
significant premium to the target share price that UK research analysts had published in respect of the Company
prior to that time.
In contrast with the value certainty provided by the Offer, Axis-Shield Shareholders are being asked to put
their faith in possible future value creation by management based on the successful execution of a strategy
that has significant execution, regulatory and market risk and uncertainty.
In light of the above, Axis-Shield shareholders may wish to consider the following:
Offer represents certainty of cash at a time of significant economic uncertainty and market volatility
• the Offer enables shareholders to realise the value of their shares in cash at a time of continued economic
uncertainty and significant stock market volatility;
• prior to the announcement by Alere on 6 July 2011, Axis-Shield's three month weighted average share
price was 328 pence per Axis Shield Share. In addition, the share price performance of Axis Shield's key
industry peers has declined on average by approximately 21 per cent. since 6 July 2011;
Significant regulatory and execution risks may remain with the standalone company
• Axis-Shield's predictions for the success of the Afinion platform in the US are predicated on achieving
important regulatory milestones. There continues to be significant execution risk in obtaining the required
approvals and a lack of clarity on the timing of when these approvals might be obtained;
• Alere believes Axis-Shield lacks the global infrastructure, scale or sales force capabilities which may be
required to meet its product roll-out ambitions;
No other bidders have publicly announced their interest
• currently, no other potential bidder has announced an interest in Axis-Shield despite Alere's interest in the
Company being public since 6 July 2011;
• in the absence of an offer, Alere believes that there is a strong possibility that Axis-Shield's share price
would fall significantly below its current share price; and
Alere will remain financially disciplined
• Alere will remain financially disciplined and will only pursue acquisitions which would provide an
appropriate return to its own shareholders.
The Offer enables Axis-Shield Shareholders to realise the value of their shares in cash at a time of continued
economic uncertainty and market volatility whilst avoiding the risks of continuing to hold Axis-Shield Shares.
Risks of continuing to own Axis-Shield Shares
1) Future value creation is, in part, dependent on FDA 510(k) clearance and CLIA-waiver approval for
Axis-Shield's lipid panel assays. Such clearance and approvals may have significant execution risk with
outcome and timeline uncertain.
An example of this uncertainty was highlighted by Axis-Shield on 21 December 2010 when the Company
confirmed that its most recent CLIA-waiver application on Afinion Albumin/Creatinine Ratio was denied after
nearly two years with the FDA.
The Company has also stated that it intends to make a 510(k) submission in "late 2011/early 2012" with
analysts assuming that the lipid panel assays will not make a meaningful contribution to revenues until 2013, at
the earliest, assuming CLIA-waiver approval is obtained within twelve months following FDA clearance of the
510(k) submission.
2) Will Axis-Shield achieve its potential in the US, the largest point-of–care market in the world, through its
distribution network?
Axis-Shield has a limited direct presence in the US. With only 18 direct sales people in the US (as per the
Interim Results), Axis-Shield relies upon a third party distributor for placements of its Afinion platform. Alere
believes such a distributor-led model is likely to have significant limitations. Given the importance to future
growth the Company has placed in the US market, shareholders may wish to ask whether the Company's
limited direct presence and sales force can ensure that its US commercial strategy is a success.
Despite Axis-Shield's optimistic commentary in its Interim Results on the success of its US sales force and
Afinion placements, shareholders should ask if Axis-Shield's US strategy is working given that Axis-Shield's
US revenues amounted to only 14.9 per cent. of its total revenues in H1 2011 and grew by only 1.9 per cent.
from H1 2010.
Alere also notes the press release from ITC Nexus Dx, dated 13 September 2011 that John Sperzel has been
appointed as Chief Executive Officer of ITC Nexus Dx, a global provider of Point-of-Care testing systems and
advanced diagnostic solutions. John Sperzel was previously the President of Axis-Shield Inc. in the USA, a
market that Axis-Shield has stated is important to achieving its growth ambitions.
3) What are the real prospects of an alternative bidder emerging and who might that be, given that Alere
approached Axis-Shield on 7 June 2011 and then publicly disclosed its interest in Axis-Shield on 6 July
2011?
No other potential bidder has yet made a public announcement of a possible or firm intention to make an offer
for Axis-Shield. It is possible that some potential bidders may be discouraged from making an offer due to
economic uncertainty and the stock market's current volatility.
4) If the Offer were to lapse, where would the Axis-Shield share price be trading?
Prior to the announcement by Alere on 6 July 2011, Axis-Shield's three month weighted average share price
was 328 pence per share.
Alere believes that the current level of the Axis-Shield share price is largely attributable to the Offer and that
the Axis-Shield share price may fall significantly below its current level, in line with the recent performance of
its industry peers, if the Offer were to lapse.
In fact, in light of the recent economic uncertainty and market volatility, the share price performance of AxisShield's key industry peers has declined on average by approximately 21 per cent. between 6 July 2011 to 21
September 2011, the latest practicable date prior to publication of this Announcement.
Alere would also highlight that, prior to 5 July 2011, being the last Business Day prior to the announcement by
Alere of a possible offer for the Company, shares in Axis-Shield have not traded at or above 460 pence per
share over the last 10 years.
Axis-Shield Shareholders may wish to consider whether the Defence Document is convincing as to when
the Company's share price will reach 460 pence in the future, in the absence of an offer.
5) Alere will remain disciplined on price and will only pursue acquisitions at a price which would provide
an appropriate return to Alere shareholders.
In Axis-Shield's Defence Document, the Company highlights precedent Enterprise Value/Revenue multiples as
an important valuation metric. Alere does not regard this as credible. Not only are revenue multiples less
relevant than other valuation metrics which are based on profitability, they fail to take into account the different
nature of Axis-Shield's revenue streams, each with structurally different margin profiles. In particular, Alere
believes that Axis-Shield's distribution business, which comprised approximately 30 per cent. of the
Company's turnover in 2010, has lower margins than its other businesses.
In fact, the Offer represents a compelling last twelve months ("LTM") Enterprise Value/EBITDA multiple of
approximately 16.2x.
In addition, Ron Zwanziger, Chairman, Chief Executive Officer and President of Alere, said during the recent
Q2 2011 Alere trading update:
"Investors should expect us to continue to deploy our cash through accretive acquisitions which further expand
our global capabilities, but as in the past few quarters, to the extent that acquisitions cannot be made at
responsible prices, additional share repurchases will remain an attractive option."
Alere believes that the Offer is highly attractive to Axis-Shield's Shareholders and represents a compelling
opportunity for Axis-Shield Shareholders to realise the value of their shares in cash at a time of economic
uncertainty and market volatility.
Commenting on the Offer, Ron Zwanziger, Chairman, Chief Executive Officer and President of Alere, said:
"There has been no material new information in Axis-Shield's Interim Results, Defence Document or in any
information announced by the Company since then.
Alere is offering shareholders 460p in cash now whereas the Board of Axis-Shield is asking shareholders to place
their faith in delivering a strategic plan that contains significant execution, regulatory and market risk and
uncertainty, which will take many years to realise."
Alere reminds Axis-Shield Shareholders that acceptances of the Offer should be received by no later than 1.00 p.m.
(London time) / 2.00 p.m. (Oslo time) on 10 October 2011.
Axis-Shield Shareholders should carefully read the offer document posted to Axis-Shield Shareholders on 11
August 2011 ("Offer Document") in its entirety before making a decision with respect to the Offer. Unless defined
herein, certain capitalised terms used in this Announcement shall have the meaning given to them in the Offer
Document.
Enquiries:
Alere Inc. Tel: [phone]

[9degrees] 22/9/2011 20:29

Poker - hang on in - they will increase their hand . If not asd will thrive anyway . Heads you win tails you dont lose !!

[slaterlpj] 22/9/2011 19:58

And now it's a war of words by Alere. It's a poker game it seems to me.

Who has the best face?

They are right though. If the Bid fails, the share price is going down. It will be a good time to buy asd cheap, but there might be a while to wait for the share price to go up again. This is not neccessarily a bad thing. I have been making money out of ASD for sometime, buying on dips and selling on highs. Just a return to normal then.

I'm going to wait and see for the next few days / couple of weeks. The price should continue to hover around the 460 mark now, so there's time to ponder.

[slaterlpj] 22/9/2011 15:38

Oh dear. Looks like 460 is begining to seem attractive after all. Looks like the eagle might have landed with a bump. :)

Holding out for more was a calculated risk, and it appears not to have been a good idea at present.

So now the choice is: Sell now; Or accept offer and wait for the bid to suceed (if it does); Or hold in the face of the bid failing, and wait for a longer period for ASD to deliver on it's promise and procuce a higher share price in the future.

Some here have said that they want the bid to fail for the latter reason. Careful for what you wish for, you could get to test that theory.

I'm not sure where I sit at the moment.

I sold a chunk much earlier for a better sp, and gambled on a higher bid. I said at the time, if the bid fails, no matter, buy more at the post bid price. I am still inclined to take that view.

The share price should fall considerably when exposed to the markets as they are now, without the bid to buffer it. So that could be an even better opportunity to fill up on cheap ASD shares.

Either way, we won't have to wait much longer to find out.

[slaterlpj] 22/9/2011 08:11

I think the (First) Eagle, has landed.

[tratante] 21/9/2011 17:53

yes indeed very helpful, thanks.