NEW YORK, March 20 – The board of directors of Aclara BioSciences, shares of which are now trading about 11 percent under cash, recently approved a plan designed to prevent a hostile takeover.
In a statement released Monday, Aclara of Mountain View, Calif., said its board of directors approved a plan that would allow shareholders to acquire the right to one one-hundredth of newly created preferred stock at one penny each any time before a person or a group acquires 15 percent or more of the outstanding common stock.
By doing so, Aclara’s board hopes to stave off any potential takeover bid that may ensue now that the company’s stock price has fallen to $5 a share, just off its 52-week low and well below the 52-week high of $66 the stock reached back in July. Aclara, which has a market capitalization of $172 million, is currently trading under cash. The company, a developer of microfluidic lab-on-a-chip technology, had $192.6 million in cash and cash equivalents at the end of 2000.
“Aclara has adopted this shareholder rights plan as a mechanism to protect shareholders during a period when uncertainty in the financial markets has resulted, in our opinion, with the company being significantly undervalued,” said Aclara’s CEO Joseph Limber.
Saying that the rights plan did not come in response to an attempted takeover bid, Aclara noted, however, that the move would not prevent a takeover. But the company said that the rights plan would in effect force any potential buyer to negotiate with the board of directors.
The company did not return a call seeking comment.
Craig Irwin, a junior analyst at Oscar Gruss, said that the recent sell-off in genomics stocks has left several companies, including Genomic Solutions and Compugen, trading near to or under cash.
“This shows that investors are feeling insecure about these companies’ ability to become profitable,” Irwin said. “They are looking for companies that have products and are easily understood.”
Irwin noted that in Aclara’s case, the stock’s fall is particularly shocking, given the role the company has played in the life sciences. Aclara previously forged partnerships with Applied Biosystems to jointly develop instrument systems for high-throughput screening and genetic analysis. Applied Biosystems’ Michael Hunkapiller and Eric Lander, director of the Whitehead/MIT Center for Genome Research, sit on Aclara's board of directors.
Over the past few months, however, Aclara has had a run of disappointing announcements. In January Aclara agreed to pay $35 million and issue 900,000 shares of its common stock to Caliper Technologies as part of a settlement following a dispute over trade secrets. If the value of Caliper’s stake in Aclara’s stock does not reach a total value of $32 million, or $36.11 per share, in 18 months, Aclara will also have to make a cash payment to Caliper in order to make up the difference.
In addition, Aclara recently reported a 14 percent drop in fourth-quarter 2000 revenues to $733,000.
Aclara’s rights plan, which will be distributed as a dividend on April 6, is scheduled to expire in 2011. Aclara’s board set the exercise price for the rights at $40.50.