Shares in Dundee biotech firm Axis-Shield soared by 44% on Wednesday after it rejected a multi-million-pound takeover bid by a larger US rival.
The move may now trigger a bidding war for the company, which is expected to post record profits this year and see revenues break through the £100 million barrier for the first time.
US company Alere made the bid of 460p per share on June 7 37% higher than Axis-Shield’s share price at the start of the week and 45% higher than its average share price this year.
The Alere bid would value the company at £230 million. However the Dundee company, which develops and manufactures health products including tests for diabetes and syphilis, rejected the offer as it “fundamentally undervalues” the firm and its prospects.
Axis-Shield employs more than 100 people at its headquarters in Dundee Technology Park.
A statement said, “On June 7, 2011, Axis-Shield received an unsolicited and highly preliminary approach from Alere at 460 pence per ordinary share in cash.
“The board considered the proposal from Alere carefully, with its legal and financial advisers, and unanimously rejected the proposal on the basis that it fundamentally undervalues the company and its future prospects.”
Axis-Shield’s share price rocketed by 147.5p to 477p after news of the bid was revealed a 10-year high. Analysts said Alere will come back with an improved bid.
Seb Jantet from Investec said, “This is a shot across the bows. There is a potential for a bidding war companies like Siemens, Abott and Danager might be interested.”
A statement from Alere said, “Alere is keen to work towards a recommended takeover offer for Axis-Shield in a constructive manner.
“Alere believes the proposal represents a compelling value proposition, offering a high degree of certainty and a substantial premium to the current market price.”
Axis-Shield was formed in 1999 by the merger of Shield Diagnostics and Norway’s Axis Group. It is developing a new lipid test to measure cholesterol. The product is due to be launched in Europe this year and in the US in 2012.