Axis-Shield rejects 230 million hostile takeover offer from US rival Alere

Shares of Scotland-based diagnostics firm Axis-Shield soared 49% to 500 pence yesterday, after the company revealed that it had received a £230 million ($369 million) takeover approach from its bigger US rival Alere. However, its board "unanimously rejected the proposal on the basis that it fundamentally undervalued the company and its future prospects."

The indicative non-binding offer from Alere (which recently changed its name from Inverness Medical Innovations) was for 460p in cash per Axis-Shield ordinary share, which ascribes a value to the entire existing issued share capital of Axis-Shield of around £230 million, represents a premium of about: 37% to the closing share price of 335 pence on July 5, 2011, being the last business day preceding this announcement; and 45% to the average closing share price of 318 pence for the six month period ended July 5, 2011, being the last business day preceding this announcement.

The proposed price of 460p equates to a price earnings ratio of approximately 44 times Axis-Shield's underlying EPS of 10.45 pence per share, reported for the year ended December 31, 2010, Alere noted.