Obrem Capital wants MDS to explore alternatives, considers calling special meeting

By Lisa Kerner

Charlotte, N.C., Oct. 30 - MDS Inc. investor Obrem Capital Management urged the company's board of directors to hire one or more investment banking firms to help the company evaluate strategic alternatives, including the sale of individual business units.

Obrem made its request in a lengthy Oct. 30 letter to the MDS board and management.

According to Obrem, one of MDS' largest shareholders, it would be "highly inappropriate for the company to ignore prospective bids given the sizable gap that now exists between the share price of MDS and the fair value of its assets."

Obrem said it's unlikely the entire company could be sold to a strategic buyer "for the simple reason that this collection of assets does not belong together in the first instance."

The investor suggested the sale of the legacy Sciex business, the molecular devices business and the pieces of MDS Pharma Services, followed by a spinoff of MDS Nordion.

According to Obrem, the easiest group of assets to divest would be those in MDS Analytical Technologies.

In closing, Obrem said it is prepared to call a special meeting of shareholders with two specific agenda items: the removal of one or more long-standing MDS board members and a shareholder vote on pursuing Obrem's suggested actions.

MDS is a Toronto life sciences company.

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