Shareholders thwart Alere's takeover attempt of Axis-Shield

A group of Axis-Shield shareholders has rejected Alere's £230 million ($375 million) takeover bid for the company, according to Scotland on Sunday. As the news service notes, the deal is now "dead in the water at its current price," barring a change of heart by one of the investors. The investors--Aviva, Artemis and Axis-Shield's own directors--own more than 10% of the company's stock.

Axis-Shield focuses on developing "novel patentable diagnostic markers and technologies" that can be commercialized to meet clinical needs, both in the laboratory and at the point of care, according to the company's website. And it's the point of care technology that greatly interests Alere, according to Reuters.

The two companies also have rival tests; Alere's Cholestech LDX machine competes with Axis-Shield's Afinion system, for example. "There are two reasons why they want to acquire (Afinion); either to keep it outside of the competition or to continue pushing it (to the market)," said Daniel Stewart analyst Vadim Alexandre, as quoted by Reuters. In addition, Axis-Shield could launch new products this year that would rival existing Alere offerings.

Although Alere may not be done with its pursuit quite yet, it may have to pay more for Axis-Shield, notes Sebastien Jantet, an analyst at Investec Securities, who thinks £285 million might be a fair price for the company. "Whilst Alere now owns around 9% of Axis, the deal is far from done. From a tactical perspective, persuading Alere to pay up will either require another bidder to emerge or shareholders to dig in their heels," Jantet adds, as quoted by the news service. Indeed, other bidders could be in the hunt, including Abbott, Roche and Siemens, said Mark Niznik, a fund manager at Artemis.

Alere made its initial move for Axis-Shield with its £230 million offer last month, but was rebuffed. It then turned to Axis-Shield shareholders directly Aug. 5. Despite the presumed rejection, a union with Alere could benefit Axis-Shield. "Alere is such a big player and has such a widespread, very powerful distribution that the potential benefit to the Axis-Shield product line would be huge," said Greg Simpson, an analyst at Wunderlich Securities, as quoted by Reuters.

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