After losing $575 million in its last quarter, the board at MDS has bowed to the intense pressure of its critics and begun to explore the sale of some of its assets. MDS has three key divisions that could wind up on the sales block: the contract research group MDS Pharma Services, lab equipment maker MDS Analytical Technologies and medical isotopes group MDS Nordion.
A special committee made up of independent directors will undertake a review of the company and Goldman Sachs has been brought in to advise MDS. Their decision was made after the hedge fund Obrem Capital Management, which owns 6.6 percent of the company, demanded a break-up of the conglomerate. They estimated that all three divisions could fetch $2.5 billion.
But those prices may be a thing of the past. Analyst Maher Yaghi of Desjardins Securities says that the company would have worked out a deal nine months ago in order to have grabbed a premium for its assets. With the industry in a tailspin, there may well be no buyers at that price.
- read the report from the Globe and Mail