Diagnostics group Axis-Shield has jumped nearly 50% after it rejected a £230m bid from US rival Alere, opening up the prospect of an auction for the company.
The US group has offered 460p a share in cash and said it hoped it could work to a recommended deal. But Axis - created in 1999 through the merger of Shield Diagnostics and Norway's Axis - said the offer undervalued the company and its future prospects.
Axis shares jumped 164p to 499p as investors bet on a higher offer or rival bidder. Analyst Sebastien Jantet at Investec said:
Today's announcement from Alere effectively puts Axis in play and, whilst a 460p approach may look attractive given the current price and Axis' track record, we think it undervalues the company. We would urge investors to hold on and believe we may well see another bidder emerge. We up our price target to 530p, being our previous 410p target plus a 30% premium for control, and remain buyers.
He suggested Siemens, Abaxis, and possibly Danaher as potential rival bidders.
