Alere ($ALR) has reached an agreement to buy Axis-Shield after modestly increasing its proposed purchase price to £235 million. The agreement ends months of back and forth between the two companies over what Axis-Shield considered an inadequate bid.
Alere made its initial move for rival Axis-Shield with its £230 million ($375 million) offer in July, but was rebuffed. It then turned directly to Axis-Shield shareholders Aug. 5., who didn't seem too excited about the bid either. But based on shareholder feedback and the "ongoing volatile economic and market backdrop, the [Axis-Shield] Board believes that Alere's revised acceptance condition of 50[%] will most likely be met, particularly in the light of their current shareholding of 29.9[%]," according to an Axis-Shield statement.
Many analysts see Alere's acquisition as quite a bargain. Alere had played a ''very clever game'' and will buy the Scottish-Norwegian diagnostics company at a bargain price, according to Collins Stewart analyst Julie Simmonds, who added that Axis-Shield was ''bowing to the inevitable'' because it could lose its London Stock Exchange listing if 75% of the share capital was acquired by its U.S. rival, as The Courier notes.
''They (the Axis-Shield board) were in a difficult situation. Potentially if they had opened up discussions with Alere at an earlier stage and given them more information then they may have been able to get a higher price, but there was no guarantee that would happen," Simmonds said.
"Capitulation seems to be the order of the day...We believe, under more settled circumstances, the board may have considered to take a more robust position. The move from 460 pence to 470 pence is not much more than a token gesture," Seymour Pierce analyst Mike Mitchell said, as quoted by Reuters.