Largest HLS Investor Dumps All Shares As Buyout Approaches
IMCista | 18.08.2009 12:48 | SHAC | Analysis | Animal Liberation
On August 1st, Win Animal Rights (W.A.R.) launched a campaign to influence the top Huntingdon Life Sciences (HLS) Investor, Morgan Stanley, (who recently bought LSR stock) to divest their large holding of LSR shares. With 679,225 shares, Morgan Stanley was a 5% owner of Europe's largest and most exposed vivisection laboratory, swiftly selling all their LSR stock within a week of the campaign against them.
Protests included W.A.R. visiting the homes of 5 senior executives, as well as the two co-presidents of the firm, and five days later demonstrating at the headquarters of Morgan Stanley in New York City. This was followed by visits to the homes of multiple senior executives of the company.
The divestiture comes as LSR/HLS CEO, Andrew Baker, moves forward with his plans to acquire HLS and make it a privately held company, therefore delisting themselves from the NYSE (a major target in the campaign to close HLS). The proxy statement makes it abundantly clear that activists have had a tremendous impact on LSR/HLS' financial predicament, causing them to have limited options for the future.
Previous features: Novartis CEO's hunting lodge destroyed | Highgate Farm Protest Camp | Operation Liberation: Highgate Rabbit Farm | Largest Shareholder Barclays and Top Investors Dump HLS | World Day for Animals in Laboratories March | SHAC supporter unlawfully arrested at Barclays Bank | SHAC Shakedown City Investors | Top HLS Investors Dump Shares | HLS Exposed - Yet Again! SHAC To Shakedown Financial Investors In The City | 50 Years For The UK SHAC 7 | Anti-vivisection campaigners convicted of blackmail | Largest HLS Investor Dumps All Shares | SHAC Prepares For National March & Rally | Victory for animal rights campaigners | Activist Imprisoned for Shouting | Fisher Scientific Embarrassed Over Links with HLS | SHAC World Day for Lab Animals | Asahi Glass Protesters Harassed by Police | "March Against the Murderers"
The proxy report states: "Since December 1999, LSR has been, and employees, directors, stockholders, customers, suppliers and advisors of LSR and financial firms directly or indirectly associated with LSR, in each case on account of such relationship with LSR, have been, the target of actions by animal rights activists, such actions including physical violence, harassment, vandalism, bomb and death threats, protests and demonstrations. No other publicly traded company in the contract research organization (“CRO”) industry has been affected by the actions of animal rights activists to a similar extent."
The in depth presentation, assembled by the Board of Directors appointed special committee, also detailed the imminent danger of HLS defaulting on their long term debt and being delisted by the NYSE Arca. Another analysis on the pending merger, from a New York Times financial blogger, concluded that the manager buyout was almost certainly due to animal rights advocates, which affected the entire process, and that "the facility have been perhaps the biggest targets of the European animal rights movement".
The news follows the torching of Novartis CEO's hunting lodge, due to the companies ties with HLS, and precedes HLS supplier Biocair reporting that they will never deal with HLS again. The statement came after a series of demos from Animal Rights Cambridge, one of which was attacked by violent opponents (see video). HLS customer Arpida AG also vowed this week not to deal with HLS again, as SHAC, Win Animal Rights and other animal rights groups move ahead with plans to focus on HLS' primary customers, calling on supporters to "put this dying monster of a company out of it's (and our) misery".
Background: Huntingdon Life Sciences (HLS)
Huntingdon Life Sciences (HLS) are in the business of poisoning healthy animals to death. They are a contract testing operation that tests products for others. They have three sites two in the UK and one in the US. Five hundred animals are put to death every day by HLS, killing tens of thousands of horses, cats, dogs, primates, rabbits, hamsters, rats, mice and fish amongst others each year.
Shareholders, stockbrokers, market makers, suppliers and clients have all dumped HLS, including the world’s largest companies; all four main high street banks in the UK, the world’s largest financial institution, the world’s second largest bank and the world’s largest insurance broker. Huntingdon are $72 million dollars in debt with NO commercial bank and insurance company anywhere in the world prepared to deal with them.
HLS’ key weakness is their finances and by throwing the spotlight on those funding their abuse campaigners across the globe have managed to bring HLS to the brink of financial collapse. Throughout the campaign activists have made financial history as one by one major corporations have yielded to protester power and severed their links with the failing company.
Campaigners use evidence obtained in seven undercover investigations at their different laboratories in the UK and USA where HLS workers have been caught on film punching puppies in the face, simulating sex with animals in their care, cutting open primates while they are still alive and falsifying experiments to get products on the market. HLS workers have even been caught drunk at work and dealing drugs at the labs.
Huntingdon Life Sciences have a criminal record from a British court of law for breaking the Companies’ Act. They are the only UK laboratory to ever have their licence revoked by the government.
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That proxy statement
18.08.2009 19:52
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More info on Baker buyout and HLS financials
20.08.2009 16:17
>> Baker Buyout
Andrew Baker has secured a loan of $113 million to buy out all the shares in HLS through a company he has set up called Lion Holdings. This offer has been accepted by the board of directors who have been in a panic over the future of HLS. If this offer goes through, it would mean Andrew Baker would own the whole company, and that HLS would have a new $113 million debt.
HLS already have huge debts with will be due for collection in the next two years and they simply cannot pay them off, they also can’t find anyone to refinance the debt, so this buyout is a last resort to try and save the failing company.
It is well cited throughout the financial industries that this deal can only mean the company was near to going bust. In fact HLS is so weak that there are specific clauses in the buyout deal which prevent any disputes being aired in public; it has been reported in the media that this only happens when a company is in trouble and wants to hide that fact.
Whilst Bakers deal is binding, (meaning if he pulls out he would face a financial penalty) his offer can be withdrawn if HLS lose any of their customers. This is because if HLS lose a customer they will be in serious financial trouble, and unable to make their loan repayments.
This buyout deal is not yet signed and sealed as the shareholders have to vote by majority to accept the offer, and many of them bought their shares over $8.50 meaning they will lose a lot of money. Already three law firms are starting class action lawsuits to sue HLS, so even if the buyout does go through, HLS stand to lose a significant amount of money in legal fees and payouts.
>> First quarter financials expose hls' weakness
HLS published their first quarter finances in April 2009. HLS always try to put a positive spin on everything they do, but they struggled greatly this time - the figures speak for themselves. Without wanting to bog you all down with facts and figures you will be pleased to know that their income in the first quarter of this year is down 24% and net new orders made during the first quarter were down 43% compared to the same time last year. This is very significant, as HLS are already in debt and with very high costs - any drop in income has a knock on effect throughout the company.
What this really means - and we cannot emphasise this enough - is that now more than ever HLS will be clinging on to their customers, as they simply cannot afford to lose them. HLS are now implementing staff cut backs to cope with the drop in demand and the Directors weren’t able to take bonuses last year, some even took wage cuts. If HLS were to lose two of their big customers without new ones taking their place during this economic crisis, they would only survive with some kind of bailout. Losing custom could now lead to bankruptcy, so we urge you all more than ever to stand up for the animals; we cannot do this without your help.
Those at SHAC are already working tirelessly to close HLS so we need any one who can to get out on demos to get organised; and those who cannot get out on protests can help in a massive way by writing more letters, sending more emails, making more phone calls or helping raise funds for the campaign. Every little thing you do is most welcome and worthwhile - even if you can’t do as much as you like, just holding a monthly information stall or leafleting in your local town could lead to a whole troop of activists joining the fight to close HLS.
Just remember the ADI expose from last year if you need any reason to step up against HLS. Never forget the animals we are fighting for...
“On the days when the animals were killed at the end of the experiment, the other monkeys would fall silent. The normal shrieking, chatter, and rattle of the cages fell to an eery silence. The magnitude of the monkeys’ awareness of the nightmare they face could not be clearer.”
- ADI Undercover reporter 2008
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Latest on HLS financials
24.08.2009 16:36
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
SHAC
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