Nordion fails to muster enough votes for Sterigenics takeover
Medical isotopes firm extends voting period in hope that deal will pass
Canadian medical isotopes company Nordion Inc. has lengthened the period for shareholders to vote on its takeover by Chicago-based Sterigenics after failing to get enough votes to pass the deal.
Sterigenics’ all-cash acquisition proposal at $12.25 US per share requires support from two thirds of shareholders to go ahead.
However, as of Tuesday, it had the support of only 64.8 per cent of shareholders, despite a recommendation by the board to go ahead with the deal.
Nordion, a former Crown corporation that relies on the aging Chalk River nuclear reactor to provide it with medical isotopes, has extended the voting period until a special meeting now set for June 3.
Board members hope more shareholders come forward to vote, as otherwise the deal may fail. The board warns that share prices may be hard hit if the deal is not approved.
The federal government is determined to close Chalk River's isotope production in less than two years, and when it does up to 40 per cent of the world's isotope supply will vanish, with no new supplier ready and waiting to fill the void.
The current federal budget clears the way for Nordion, formerly part of Atomic Energy of Canada Ltd. and sold to MDS Health Group in 1991, to be sold to a foreign parent. Sterigenics, based in Deerfield, Illinois, is involved in sterilization technology and gamma and electron beam irradiation.
Nordion saw acquisition by Sterigenics as the best alternative for the company, which is searching for a new source of isotopes, but may have to exit that segment of the business when the Chalk River reactor closes.