Majority shareholder joins Biota board

Majority shareholder joins Biota board

Farooq Khan must be quietly seething. Biota has just appointed a director, Andrew Tyndale, from the ranks of new majority shareholder Babcock & Brown.

Tyndale has joined Biota following a $2.5 million private placement into the biotechnology company by the investment banking group. Babcock & Brown purchased 5.6 million Biota shares at $0.45, which after dilution is a 7.5 per cent holding in the company.

But the difference between Khan and BigShop's attempt to gain a seat on the board, and the success of Babcock & Brown's Tyndale in being appointed to the board points to the strategy being taken by Biota's board in growing the company.

"The rejection of BigShop's nominee was based on the person they nominated and their relevant experience to the company strategy going forward," said Biota Chairman John Grant. He said that the company applied the same criteria in selecting Tyndale that they had applied to Khan as BigShop's nominee.

According to Grant, Tyndale's personal and extensive experience in mergers and acquisitions, his role as the co-head of Babcock & Brown's corporate finance division in Australia, as well as his ability to draw upon the resources of the investment bank all played a role in the choice of Tyndale as a new director.

Biota is actively pursuing merger and acquisition opportunities, and discussions are in progress with a number of Australian and international biotechnology companies. The company sees Tyndale and Babcock & Brown as being a crucial part of this process.

Unusually for a biotechnology company, Biota has until now lacked institutional investors, and according to Grant, the company is looking to increase its support from this direction, with the potential for more private placements in the coming months.

"We see some merits in bringing [institutional investors] onto the register," he said. Grant is also expecting to have to go to shareholders for approval at some point in the future, indicating the potential for placements of 15 per cent or more of the company's shares.

For his part, Tyndale is enthusiastic about the opportunities offered Biota. From his perspective, there are a lot of listed biotech companies in Australia that are struggling to stay afloat, and an urgent need for some rationalisation of the industry. Too many companies, he said, are spending large sums of money on administrative costs that would be better spent on R&D activities.

"We've been looking at the sector for quite a while and think there are a large number of companies in the sector that should not be listed ... a large number of listed biotechnology companies have to move toward consolidation," Tyndale told Australian Biotechnology News.

"We see our role at Biota as adding finance, stabilising the share register and providing advice on mergers and valuing opportunities,"

While the investment in Biota is the first made by Babcock & Brown into a listed biotechnology company, Tyndale said the group was also in discussions with a couple of other companies. "But having said that, we would like to make Biota our primary investment [in the sector] and would probably make other investments through them," he said.