Alere ($ALR) is facing pressure from an activist investor to sell off some of its business and focus on diagnostics, and now, in round two of a squabble between the two, Coppersmith Capital Management is telling shareholders they could more than double their value by following its plan.
In a letter to stockholders, Coppersmith reiterates its position that Alere should ditch its Health Information Solutions business, sell its consumer products joint venture with Proctor & Gamble and consider shipping out its toxicology unit. That would raise almost $4 billion Alere could put toward paying down its mounting debt, and the result could boost Alere's share price between 74% and 136%, according to Coppersmith.
To get the job done, Coppersmith has put forth three nominees to serve on Alere's 10-person board, and the issue will come before shareholders at the company's Aug. 7 annual meeting.
For its part, Alere maintains that its buying spree over the past year has been in shareholders' best interest, and CEO Ron Zwanziger wrote in a June 27 letter that Coppersmith's plan to auction off profitable segments would mar the company's long-term growth, reflecting "a failure to understand our business and our industry."
But Coppersmith puts little faith in the company's ability to boost its flagging share price, writing that Alere has "proposed only feeble half-measures, with no quantified targets or timetables, in what appears to be nothing more than an attempt to placate frustrated stockholders."
Neither party is commenting on the fight outside of open letters.
Alere has been on shaky financial ground of late, losing $62.3 million last quarter despite a 10% jump in revenue, which reached $735.2 million. The company lost $62.7 million in the fourth quarter of 2012 on $756 million in sales.
Coppersmith, with a 7% stake of the company, is Alere's fourth-largest shareholder.
- read Coppersmith's letter (PDF)
- and Alere's