Amrad, Circadian compromise on board future

An 11th-hour resolution has ended a boardroom stoush between Amrad Corporation (ASX: AML) and Circadian Technologies (ASX: CIR).

Just hours before shareholders were due to vote on the future of Amrad's board, the companies agreed to replace two incumbent directors with two of Circadian's choosing.

Chairman Prof John Mills is to become deputy director, making way for Sigma Pharmaceuticals director Olaf O'Duill.

Amrad non-executive directors Jeremy Curnock Cook and Henry Nordhoff have chosen to relinquish their roles on the board, with Circadian nominated Bob Moses - formerly vice-president of CSL - taking up a position as non-executive director.

Helen Cameron, a non-executive director tagged for replacement in the original Circadian proposal, has managed to hold on to her seat.

Mills said he was not disappointed at having to hand over the reins to O'Duill.

"We're very pleased because we think this is a terrific outcome," Mills said. "Olaf and I are going to work as a team bringing together our non-overlapping skills."

Mills said Amrad was no longer concerned that Circadian, which owns 19.3 per cent of the company through its wholly-owned subsidiary Fibre Optics, was attempting to take control of the board through its nominations.

"I know them (O'Duill and Moses) and I think they are independent people, with independent underlined in bold-faced italics," he said.

The market reacted nonchalantly to the announcement, with analysts speculating it would take more than a boardroom re-shuffle to enthuse investors.

At the time of writing only 30,000 shares had been traded with the stock price hovering about 76 cents.

One Melbourne analyst, who did not wish to be named, described the announcement as "neither here nor there", saying there were some long-terms issues that needed to be resolved before investors returned to the company.

Salomon Smith Barney biotech analyst Rosemary Cummins said that while the board changes were positive, investor confidence in Amrad remained low.

"I think investor confidence levels in the company were so low that something had to change - either Amrad had to come up with something new or there had to be changes to the board," Cummins said.

"Investor resistance is so high that I think they are waiting for something solid to come out, that's how disenchanted they are."

She said the market would also be waiting for the board to prove itself, which it should have done by the time the company's hepatitis B clinical trial results were through at the end of the year.

Circadian executive director Graeme Kaufman said the share price was simply drifting at the moment as investors watched what happened next.

"I think if I was sitting there as an investor I'd be interested to see what the new board does and I think, with strong people like Olaf on the board, over the next weeks and months that will play out," Kaufman said. "Once people see the new board in action they will be happy."

He said he expected one of the first things the board would do was conduct a critical review of Amrad's project pipeline.

"Clearly there are gaps at the moment in their main projects and I would have thought they'd be looking at new projects to fill those gaps," he said.

But Mills concurred, saying it was likely to be business as usual for the new board.

"I don't think there's really any major new issues that are going to be coming up," Mills said. "There are number of things on the boil including clinical trials and the review of our SOCS program, which is now going into commercialisation...there may be some new ideas."

Retiring board member Curnock Cook was expected to remain a consultant to Amrad, while Nordhoff has chosen to leave to concentrate on other business commitments in California.

While Amrad's general meeting was cancelled after the agreement was reached this morning, the new chairman will still address a shareholder meeting today.