Abcam, a leading UK life sciences group, has found itself at the centre of controversy as it defends its proposed $5.7 billion takeover by Danaher. The company is firmly asserting that it diligently rejected inadequate bids and, through competitive negotiations, compelled the US-based Danaher to increase its offer. This dispute has come to light due to objections raised by Abcam’s co-founder, Jonathan Milner, who plans to vote against the deal and has ambitions to unseat the board and assume the role of CEO.
Competitive technology valuation
Abcam CEO Alan Hirzel has vigorously defended the deal, describing the process as robust and competitive. He stated, “This has been a robust process, a competitive process right to the end, and the board has recommended the highest offer.”
Co-founder Milner, who holds a 6.1 percent stake in the company, contends that the offer significantly undervalues Abcam. He also alleges that Danaher’s performance forecasts for Abcam were notably lower than the company’s own guidance, and he accuses the board of not adequately considering other potential buyers.
However, Abcam’s board, in a forthcoming shareholder circular, asserts that the US$24-per-share offer is the “highest and best price” they received after engaging with 30 potential counterparties. These discussions involved 21 companies and 12 financial sponsors. The board further clarified that the closest competing offer had been $22.50, and Danaher had raised its bid twice, starting from an initial offer of $20.50.
Value of technology
Hirzel, who has led a transformation of the company since 2014, emphasized that not only did Danaher offer the highest bid, but they also committed to allowing Abcam to operate independently while developing collaborations in areas such as diagnostics and bioprocessing. Importantly, all bidders, including Danaher, based their valuations on Abcam’s published forecasts, contrary to Milner’s claims of lower estimates.
Abcam, founded in 1998 as a spinout from the University of Cambridge, specializes in creating products for scientific research, such as custom antibodies. Milner, who served as the chief executive until 2014, argues that the company has been mismanaged since his departure. In May, he initiated a campaign to overhaul the board.
The $24-per-share offer, according to the company, represents a 39 percent premium to the undisturbed share price on 16 May, before Milner’s announcement of an extraordinary general meeting, and a 48 percent premium to the volume-weighted average price of $16.21 for the 30 trading days before 16 May.
Dropping AIM listing in favour of Nasdaq
Milner has also raised concerns about whether Abcam management prioritized their own bonuses over the best interests of shareholders. However, Abcam clarified that management compensation remained unchanged due to the deal. Discussions regarding existing management incentive schemes were held after the offer price and other terms had been agreed upon.
Abcam made the strategic move to drop its AIM listing last year in favour of a sole listing on Nasdaq. Milner, on the other hand, believes that a UK listing could be advantageous and has expressed concerns about the future of Abcam’s UK headquarters and jobs. The company has reassured stakeholders that Danaher is committed to maintaining Abcam’s current geographic presence, including its UK headquarters.
In this high-stakes showdown, Abcam is vigorously defending its technology valuation, emphasizing the competitive nature of the negotiations and the compelling offer presented by Danaher. The outcome of this dispute will undoubtedly shape the future direction of Abcam in the rapidly evolving life sciences and technology sectors.