Nordion jumps 10 per cent following friendly takeover offer from Sterigenics

OTTAWA – Shares in Nordion Inc. (TSX:NDN) gained more than 10 per cent Monday, following a friendly US$727-million takeover offer for the health sciences company.

The stock closed up C$1.22 at C$12.74 with nearly six million shares exchanged. That was up from C$11.52, before the deal was announced after the close of markets Friday.

Sterigenics, an affiliate of Chicago-based private equity firm GTCR LLC, has offered of US$11.75 per share cash for each Nordion share.

Nordion is one of the world’s leading suppliers of medical isotopes, used for certain types of medical imaging. It also provides sterilization technologies.

RBC Capital Markets analyst Douglas Miehm said the bid “appears reasonable but could be at the lower end of expected value depending on how negative factors (outstanding lawsuits and internal investigation, etc.) have played in the assessment.”

“We also await details of the process to determine the likelihood of a competing bid,” Miehm wrote in a note to clients.

The sale follows a strategic review by the company that began in January 2013. Nordion will remain as a standalone company within Sterigenics and continue to operate under the Nordion name.

Some of the money to fund the transaction will come from Nordion, which has about US$319.5 million of cash and equivalents, worth US$5.16 per share.