Abcam to consider putting itself up for sale – but Jonathan Milner claims it’s a ‘tactic’ to derail his bid

Abcam plc’s board has “unanimously decided to initiate a process to explore strategic alternatives for the company”, up to and including an outright sale.

The board of directors has retained Lazard and Morgan Stanley as financial advisors to assist in an open-ended review of strategic alternatives. Latham & Watkins has been appointed as legal advisor in connection with the review process.

A spokesperson for Abcam said: “The review is starting immediately; the company has not set a timetable for the conclusion of the review.”

A global giant in the supply of life science research tools, the company was founded in Cambridge in 1998 by Jonathan Milner, who took the company to a flotation in 2005 before handing on the CEO reins in 2014.

The existing management team, led by CEO Alan Hirzel, has seen advances in its global footprint, with a worldwide customer base of 750,000 life science researchers who use Abcam’s antibodies, reagents, biomarkers, and assays. Its revenue for the 2022 fiscal year was £362million and its current market capitalization is over $4bn.

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It has grown net share in its traditional antibodies market – by an average rate of 28 per cent across 2021 and 2022 – while also expanding its product range. The company has had one major setback: a $130m overspend on the introduction of its supposedly unifying ERP (Enterprise Resource Planning) software project.

This setback – and what Dr Milner’s team calls “a share price materially below where it should be” – was enough to concern Dr Milner to the point where he has proposed a possible return to active duty at Abcam, via a bid to install himself as executive chairman at the Cambridge Biomedical Campus-based company.

With an EGM due on July 12 to settle the issue, Abcam said on Friday (June 23) that “the comprehensive [review] process will begin immediately and will evaluate a broad range of options to maximise shareholder value, including a potential sale of the company”.

It adds: “As previously disclosed, Abcam has received strategic inquiries from multiple parties over the past few weeks.

“Abcam is a unique asset that provides innovative products and solutions for the global life sciences community. Our board is fully aligned in its belief that the best way to maximise value for shareholders is to comprehensively review the company’s strategic alternatives, including a potential sale of Abcam. We will pursue the pathway that maximises value for our shareholders and also ensures successful outcomes for our customers and employees.”

Dr Milner responded in a letter to shareholders. He pointed out that, as a shareholder, he would stand to benefit if a sale were successful, the implication being that the issue is about more than money.

He also hinted that the suggestion that there are suitors for Abcam is a diversion, calling the suggestion one of many “tactics the entrenched Abcam board and management team have employed since my recent efforts to restore financial and operational performance and maximise value for all shareholders”.

Dr Milner added: “The company’s claims about ‘strategic inquiries’ are a blatant and desperate attempt to derail a proxy challenge. If you want the company to provide return on your investment through a strategic transaction, you should vote FOR the proposals, not against them.”

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Dr Milner also contended that, under his leadership, there would be more M&A (mergers and acquisitions) activity, not less, saying: “If elected, I will seek to create a strategic review committee to explore M&A opportunities.

“Conversely, the current board owns almost no company equity, has a reputation in the industry for rebuffing strategic advances, and I believe its entrenched members are more interested in keeping their seats than exploring strategic options.”

He concludeed: “The significant share price rise caused by my recent involvement underlines my view that there is an urgent need for change at Abcam.”

For anyone who wants a précis, Abcam has said it may put itself up for sale – while Dr Milner is arguing ‘it’s all a diversion, vote for me on July 12’.