Abcam defended its handling of the proposed $5.7bn Danaher takeover, insisting the UK Life Sciences company rejected inadequate offers and pushed the US Group to increase its bid.
Alan Hirzel is the chief executive officer of the Cambridge-based firm. He dismissed the accusations made by Jonathan Milner who wants to remove the board, and also take over the CEO position.
The board recommended the highest bid. This was a vigorous process. It was a competitive one right up to the very end.
Milner, who owned a 6.1% stake in Abcam last month, argued the Danaher offer undervalued Abcam. He said Danaher’s expectations for Abcam were significantly lower than the company’s own guidance. He claimed that the board did not give other buyers sufficient consideration.
In a shareholder circular to be published Thursday, Abcam’s board stated that the $24 per share offer was “the highest and best price” they had received from 30 potential counterparties. This included 21 companies and twelve financial sponsors. The board said that the closest competing bid was $22.50 and that Danaher raised its initial offer of $20.50 twice.
Hirzel said that he had transformed the company, which had resulted in a five-fold increase in the value of its shares since he assumed control in 2014. He claimed that Danaher not only had the highest offer, but also would allow Abcam continue to operate independently while working together in areas like diagnostics and bioprocessing.
He said that Danaher, and all the other bidders, had based their estimates on the published forecasts of the company. Not lower estimates like Milner suggested.
Abcam was founded as a spin-off from the University of Cambridge in 1998. It creates products that scientists can use for research, such as custom antibody. Milner served as chief executive from 1998 until 2014 when Hirzel replaced him. He remained on board until 2020. He claims that Abcam was mismanaged after his departure, and in May launched a campaign to revamp the board.
The company stated that the $24 per share offer represented a 39 percent premium over the price of the shares on May 16, just before Milner announced he would call an extraordinary general assembly, and a 48 percent premium over the volume-weighted price average of $16.21 in the 30 days prior to May 16.
Milner also questioned if Abcam’s management put its bonuses ahead of the best deal possible for shareholders. The company, however, said that the deal had not affected the pay of management. The company said that the talks between Abcam, Danaher and Danaher regarding existing management incentive programs were negotiated only after the price of the offer and other terms agreed.
Abcam last year dropped Aim’s listing and went with a single listing on Nasdaq. Milner, however, believes that it would also be able to benefit from a UK-based listing. He said last month he believed Abcam’s UK headquarters as well as its jobs are in danger.
Danaher said Thursday it was committed to Abcam’s geographic presence in the UK, which includes its UK headquarters.