Axis-Shield gives up fight as it accepts Alere’s £235m bid

THE board of Dundee-based medical testing kit maker Axis-Shield yesterday raised the white flag in its takeover battle after US life sciences giant Alere increased its offer for the firm.

The Scottish firm’s directors recommended the Massachusetts-based group’s 470p-a-share cash bid, which values Axis-Shield at about £235 million and represents a 10p increase over the original offer made in June.

Alere’s bid comes at a 40 per cent premium to Axis-Shield’s share price on the day before the first offer became public.

Axis-Shield’s board, led by chief executive Ian Gilham, said it had sought feedback from investors and, after Alere had built up a near-30 per cent stake, it decided to back the sweetened offer, despite it “fundamentally undervaluing” the company.

Alere had cut the level of acceptance it wanted for the bid from 90 per cent of shareholder votes to 50 per cent and said it would de-list the firm if its stake rose to 75 per cent, leaving the remaining investors with few chances to sell their shares.

Mike Mitchell, an analyst at Seymour Pierce, said: “The move from 460p to 470p is not much more than a token gesture. However, since the start of July, the wider market uncertainty has placed Alere’s offer in an increasingly-favourable position.”

Numis Securities shifted its rating from “add” to “hold” after the “grudging” acceptance by Axis-Shield’s board. Analyst Charles Weston also moved his target price from 535p to the offer value at 470p.

Before the recent stock market turmoil, analysts had talked about a 550p bid being a more appropriate price.

Shareholders now have until 24 October to accept the revised offer after the Takeover Panel agreed to extend the deadline from next Monday.

Neither Alere nor Axis-Shield would comment yesterday on any job implications if the deal goes through, with both saying it was premature to discuss the matter before shareholders had voted on the offer.

About 110 of the 550 staff at Axis-Shield – which was created in 1999 through the merger of Dundee University spin-out Shield Diagnostics and Norway’s Axis Group – work in Scotland.

Under its previous name, Inverness Medical, Alere built its Lifescan business in the Highland capital before selling it to Johnson & Johnson in 2001 for $1.3 billion (£794m). Alere already has 200 staff in the UK, including at Dundee and Stirling.