Baker Deal

In 2009 Huntingdon's CEO Andrew Baker announced that he was offering to buy out HLS for $7.50 a share. This means he wants to buy all the unsold shares in the company and buy out all the existing shareholders so that he owns the company in full.

The reason he wants to do this is because HLS are at a financial crisis point. Their revenues are significantly down after losing customers and the effects of the recession, and the company themselves say they at high risk from being delisted from the NYSE - this is primarily due to SHAC's successful shareholder and NYSE campaign. HLS are struggling to keep up with loan repayments and this is now the last resort for them to save the company.

No other company is interested in buying HLS, merging, or helping them out in anyway - infact because HLS share value dropped and their financials declined so much their financial advisor resigned in February 2009 because he feared that a going private transaction (like the Baker deal) would make his involvement public knowledge and feared increased publicity and scrutiny. HLS have had to go to great lengths to fill his position as many did not want the attention of animal rights activists.

Read our page on the very telling Plymouth Report for more information about this and HLS's dire situation.

HLS' board of directors considered Baker's offer, negotiated and agreed a deal of $8.50 per share in July 2009. This buy out is not yet set in stone, as it will now go to the rest of the shareholders who have to vote on whether to accept the offer - we already know that shareholders are not happy and three class action lawsuits have been launched by lawfirms on behalf of shareholders who will lose out with the Baker deal.

There are some interesting blogs on the New York Times website regarding the buy-out:

Behind the Deal: Life Sciences
Small Deals, Big Issues

Update, 25-11-09

HLS/Life Sciences Research Inc. have announced that at a special secret meeting held on Monday 23rd November, its stockholders voted to approve the merger of Lion Holdings Inc., and Lion Merger Corp. (Both solely owned by Andrew Baker, the CEO of LSR/HLS). The NYSE Arca listing for LSR has also been suspended and NYSE will remove LSR from their listing on December 7th 2009.

LSR/HLS are now a wholly owned subsidiary of Lion Holdings Inc. Which is just another newly formed 'company' to front the merger as HLS/LSR go private to stop shareholder protests and make their financial situation even less transparent.

Only recently, HLS/LSR had got special permission for confidentiality in relation to some of the filings with the Security Exchange Commission (SEC), because the SEC filings showed what a bad financial state HLS/LSR are in. Let's not forget that Baker, with no other offers on the table, has gone down this route of a merger buy-out as a last resort to try to keep them afloat.