Oct. 6 (Bloomberg) -- Axis-Shield Plc, the U.K. maker of the Afinion diagnostic tests, accepted a sweetened 235 million-pound ($364 million) bid from Alere Inc., ending a three-month takeover battle.
Alere will pay 470 pence a share, up from the 460 pence proposed in July, the Waltham, Massachusetts-based company said in a statement. Alere extended its bid to Oct. 24. Axis-Shield of Dundee, Scotland rejected the initial offer as too low.
Alere, whose Cholestech system competes with Afinion to detect diabetes and bacterial infections, snagged Axis-Shield for less than analysts estimated the company was worth by buying shares in the open market, discouraging other suitors. A potential bidder backed away after Alere said it owned or had agreed to buy as much as 29.9 percent of the stock, Axis-Shield said Sept. 30.
“Axis-Shield accepted more likely because they felt they had no other options, not because they agree it was a fair share price,” said Charles Weston, an analyst at Numis Securities Ltd. in London, who lowered his 12-month target price to 470 pence from 535 pence today.
After talking to shareholders, and considering the “ongoing volatile economic and market backdrop,” the board decided that Alere’s hostile tender offer would succeed, Axis-Shield said in a statement today.
New Heart Disease Test
The Scottish company said it also decided to accept the bid because Alere was likely to obtain more than 75 percent of the shares, allowing it to delist the stock. That would have left investors with shares in an unlisted company.
Axis-Shield will likely benefit from Alere’s broader distribution network for diagnostic devices and funding for new products, according to Weston. The company has developed a test for cardiovascular disease and cholesterol for use with Afinion that it plans to begin selling in Europe this year.
Axis-Shield rose 18 pence, or 4 percent, to close at 468 pence in London. The stock has gained 59 percent in the past year.
Jefferies & Co. advised Alere, while Axis-Shield’s bankers were JPMorgan Chase & Co. and Peel Hunt LLP.
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