Battle for Abcam set for July 12 showdown at extraordinary shareholder meeting
Abcam plc has advised its shareholders to vote down every proposal in Jonathan Milner’s bid to take back control of the life sciences plc as it prepares for an extraordinary general meeting (EGM) on July 12.
At the EGM – announced by Abcam today – shareholders will consider eight resolutions proposed by the founder and former CEO of the life science research tools comapany seeking to, among other things, remove three of Abcam’s directors and appoint Dr Milner as a director and executive chairman of the company.
Abcam has repudiated every one of the eight proposals, stating: “If passed, these resolutions would lead to a protracted period of uncertainty and, ultimately, put the company’s operations and growth at risk. Abcam recommends that shareholders vote ‘AGAINST’ all eight of the resolutions being put forward at the EGM.”
Dr Milner initially made known his wish to be appointed executive chairman on May 30. He gave notice as per Section 303 of the UK Companies Act 2006 to Abcam’s board of directors, which was then required to call an EGM within 21 days. Alongside today’s announcement of the EGM on July 12 came a vigorous defence of the company’s current position in a just-released ‘Shareholder Circular’, of which more later.
With the Abcam team now strongly resisting the proposals, the battle for control of the immensely respected Cambridge-based company is now poised between two very different points of view. It comes down to this: is Abcam badly underperforming, or is it doing rather well?
Dr Milner founded Abcam in 1998 and led the company on to a listing on the Stock Exchange in 2005. He handed over the CEO reins to Alan Hirzel in 2014, becoming deputy chairman until he resigned in 2020 “thinking the business was in strong hands”, according to the document published by his team on Abcam’s website on June 12. He retains a 6.3 per cent stake in the company, which is based on Cambridge Biomedical Campus.
It is what happened after 2020 until the present day that appears to have alarmed Dr Milner. Having successfully developed his career as an investor, mentor and philanthropist in the last three years, he has now “given up all his directorships” to focus on becoming executive chairman and then to turn around what he calls “sustained share price underperformance”.
In his May 30 pitch, Dr Milner addressed what he describes as “poor management”, “lack of focus on core competency (antibodies)”, “underperformance” and a management team that he says “has lost focus on governance, execution and cost control”. In his June 12 pitch to Abcam shareholders, Dr Milner sets out examples of ineffective management including the alleged $130m overspend on the ERP (Enterprise Resource Planning) software project. He partly blames the situation on the fact that the CFO, Michael Baldock, is sitting on the board contrary to convention in the US.
So on to today, when Abcam responded with its own letter to shareholders. In stark and occasionally brutal language, the circular says that Dr Milner “has no substantive plan, because Abcam is a fundamentally different business from the one he left behind when he stepped down from his role as CEO in 2014”.
It continues: “When Dr Milner stepped down as CEO, Abcam’s revenue was £128million and the company’s market capitalization was approximately £800million. Its revenue for the 2022 fiscal year was £362million and its current market capitalization is over $4billion.
“That is to say that under Alan Hirzel’s leadership revenues have nearly tripled, growing by 183 per cent, while Abcam has expanded globally and increased its market share. Alan has successfully driven forward the Abcam 2.0 strategy, a plan put into place to transition the business away from being a simple broker of third-party antibodies to one that is now delivering innovative, differentiated and high-quality products, such as proteomic research reagents and immunoassays, to researchers around the world.
“In executing the Abcam 2.0 strategy, with Alan as CEO and under the board’s leadership, Abcam has broadened its focus beyond antibodies, unlocking massive opportunities in immunoassays, cellular and biochemical assays and cytokines, as well as focusing on its higher-margin in-house products. Revenue generated from in-house products grew by an average rate of 28 per cent across 2021 and 2022 on a constant exchange rate basis and accounted for over 67 per cent of overall group revenue in 2022. The company has also continued to lead and innovate in the core antibody space, gaining market share there as well. The nimbleness of Abcam 2.0 means the company can now make decisions quickly to flex investment as market dynamics change.”
The publicly available document adds that there were serious attempts for Dr Milner to rejoin the board (though not as executive chairman), and posits that if the Dr Milner plan is voted in and his strategy to enhance shareholder value adopted, “the net effect of these changes would be a sudden and significant shift in both operational and executive leadership of Abcam that puts in jeopardy the Company’s recent momentum as well as its day-to-day operations, growth strategy and competitive position”.
Dr Milner’s team was contacted for comment.