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Softly does it for biotech's hardcore

An extra 25? has been enough to win over what originally appeared to be a hardcore band of shareholders determined never to allow the biotech Cellestis to fall into German hands.

An extra 25? has been enough to win over what originally appeared to be a hardcore band of shareholders determined never to allow the biotech Cellestis to fall into German hands.

Two months since commissioning a report that said shares in the tuberculous diagnostic kit maker could be worth up to $11.53 by the end of the decade, the Cellestis Shareholders Action Group now seems to think a $3.80-a-share takeover bid is infinitely better than a $3.55 one.

"It is reasonably certain that, subsequent to a rejection of the scheme of arrangement, the share price of Cellestis would fall somewhat and may take some substantial time before reaching a price equal to this revised offer," said the action group's website yesterday in response to the revised $366 million offer from the German pharmaceutical company, Qiagen.

"Whilst many of us would not be concerned with such share price movements, there are other shareholders who would be significantly disadvantaged by such an event," said the group which is headed by Vic Bula and represents more than 10 per cent of Cellestis's shareholders.

"We could wish that this scheme of arrangement that creates this situation had never happened but it has."

Likewise, the Melbourne portfolio manager, Gavin Ross, who speaks for his clients who hold about 22 per cent of Cellestis, appears to have been adequately softened up by the extra 25?.

Ross, who originally said Cellestis was "potentially another CSL or Cochlear", told CBD yesterday: "It's a win for shareholders because it's a higher price."

"We didn't like the prospect of a $2 price," he said on the risk of the proposed scheme of arrangement being defeated.

SOUND AND FURY

The approval of the Cellestis bid, which now looks likely, will see its chief executive, Tony Radford, and his co-founder, James Rothel, each collect about $46 million by selling their collective 25 per cent stake.

Still, there is a good chance that next month's scheme meeting to approve the bid could be a little rowdier than usual, with Cellestis and even the Vic Bula-headed shareholder action group expected to cop some criticism.

"Most people I think will be stunned at such a turnaround," said one dissenting post on the Cellestis Shareholders Action Group's website yesterday.

FAR AND AWAY

The Michael Hammes-chaired Irish fibre cement company, James Hardie, has continued to make some attempt to accommodate its largely Australian base of shareholders, one year since holding its final shareholder "information meeting" in Sydney.

Hardie's notice of meeting yesterday said the annual get-together would be at 7.30am Dublin time (4.30pm Sydney time).

Shareholders would be asked to approve the granting of up to 769,656 "hybrid restricted stock units" and 719,593 "relative TSR RSUs" to Hardie's chief executive, Louis Gries.

FEW TAKERS

The recent plea by the newly installed chairman of smart meter company Intermoco Limited, John Evans, for shareholders to support a planned one-for-20 share consolidation has been met with a generous dose of scepticism.

"We believe that, with its current price and number of shares, Intermoco is simply 'off the radar screen' of many potential strategic investors," Mr Evans argued in a statement last week.

But there are concerns about the share price and some have already noticed the past links between Evans and Intermoco's 10 per cent shareholder, the chicken takeaway shop mogul, Stephen Copulos.

Evans is a director of the company, Medivac, which in 2008 paid $2.8 million in cash and scrip for a sanitary-wipe company 35 per cent-owned by Copulos.

One Intermoco shareholder to vent some opposition to the share consolidation is the financial adviser, Kiril Ruvinsky, who holds a 2.3 per cent stake.

"There are countless examples of very successful Australian small listed businesses that became very large businesses with billions of shares on issue, and those shares never stopped large investors from investing," he said in a letter to shareholders last Friday.

Ruvinsky noted how he introduced the company to its first institutional shareholder, Macquarie Bank Funds Management. "The fact that we had almost 2 billion shares on issue at the time, did not stop their investment," he said.

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