''It's very foolish of anyone to make up their mind before they've actually have seen the scheme book, independent expert's report and before they've allowed a very rational debate on the future and potential [of Cellestis],Obviously his remarks are directed at the board of Cellestis who had made up their mind before seeing the scheme book and the independent expert's report - neither of which are in existence, depending on how one interprets last Fridays ASX announcement.
The facts remain that the board had already recommended that shareholders accept the offer by Qiagen without seeing the scheme book and without seeing an independent expert's report - very foolish indeed.
LOYALTY STAKES
Having a large percentage of rusted-on shareholders is not always a welcome thing for the board of a listed company. Especially when it recommends a takeover bid.
The tuberculous diagnostic kit maker Cellestis on Friday announced it would press on with a proposed scheme of arrangement to seek shareholder approval for a $341.3 million takeover from the German molecular diagnostic company Qiagen.
This is despite the clear signs that there is a sizeable chunk of Cellestis shareholders who would prefer to hold on to their shares rather than let them go for $3.55 each.
''The deal will not go through,'' said a spokesman from the Cellestis Shareholders Action Group, Vic Bula, pointing out at least 38 per cent of shareholders were opposed to the takeover. The proposal will need the support of 75 per cent of shareholders.
''[Cellestis] has really only just started to hit its straps,'' said Bula. ''We're looking for much more reward from this than a $3.55 payout,'' he told CBD.
The Cellestis chief executive, Tony Radford, and his co-founder, James Rothel, have agreed to sell their 11.9 per cent stakes (each worth $40 million) into the Qiagen bid.
HURDLES AHEAD
The key obstacle for Cellestis trying to get the scheme through is the Melbourne portfolio manager Gavin Ross, who speaks for his clients who own about 22 per cent of the stock.
''This thing is potentially another CSL or Cochlear,'' said Ross.
Noting the possibility for Cellestis to take a commanding share of the TB diagnostic market, Ross also highlighted the potential for it to spread its diagnostic technology (originally developed by the CSIRO) into other areas.
''We can't, even with the most pessimistic assumptions, get to $3.55,'' he said.
The coming release of the independent expert's report from Deloitte has already been overshadowed by another report commissioned by the Shareholders Action Group.
The report says Cellestis has the potential - based on the take-up of its TB test kit (which is quicker and more accurate than the traditional skin test) - to lift annual sales from the current $40 million to $900 million a year. And grow its annual profits to $337 million, or around the same value as the Qiagen takeover offer.
Even the idea of a sweetened offer seems to have little chance of getting through.
Based on a 6 per cent return of equity and assumption Cellestis would capture only 36 per cent of the TB diagnostic market by 2020, the Action Group said Cellestis was worth $11.53 a share. ''You do have to wonder how stupid they think we are,'' said a recent update from the group.
But the company has urged shareholders to also consider the views of Deloitte.
''It's very foolish of anyone to make up their mind before they've actually have seen the scheme book, independent expert's report and before they've allowed a very rational debate on the future and potential [of Cellestis],'' said Tony Radford.
''I would ask them to consider whether or not there are risks in the future that they have not considered.''
