Jonathan Milner issues Open Letter to shareholders of Abcam plc
$ABCM
Dear Fellow Abcam Shareholders
I want to draw your attention to tactics the entrenched Abcam Board and management team have employed since my recent efforts to restore financial and operational performance and maximize value for all shareholders. The significant share price rise caused by my recent involvement underlines my view that there is an urgent need for change at Abcam.
The Company recently said it has received “strategic inquiries from multiple parties over recent weeks” and implied that I would be hostile to such opportunities. Those contentions about me are utterly wrong. As a 6.3% shareholder in the Company, I would benefit from a sale at a favourable price. If elected, I will seek to create a strategic review committee to explore M&A opportunities. Conversely, the current Board owns almost no Company equity, has a reputation in the industry for rebuffing strategic advances, and I believe its entrenched members are more interested in keeping their seats than exploring strategic options.
The Company’s claims about “strategic inquiries” are a blatant and desperate attempt to derail a proxy challenge. If you want the Company to provide return on your investment through a strategic transaction, you should vote FOR the proposals, not against them.
Shareholders deserve a Board that will act in the best interests of all shareholders to maximise the Company’s value – ADS Shareholders should URGENTLY USE THEIR ADS VOTE INSTRUCTION FORM TO VOTE IN SUPPORT OF ALL PROPOSALS to protect the value of their investment.
Abcam has long been an M&A target
Abcam is an outstanding company in a growing market and as such should command a significant premium. However, Abcam’s current weaknesses at the Board and management level have resulted in a lack of focus and significant share price underperformance.
Abcam’s incumbent directors are not incentivised to drive a deal at the right price
The current Board and management team are not incentivised to drive shareholder value. The Board and management own less than 1% of Abcam combined, and CEO Alan Hirzel has a discretionary “good leaver” provision in his contract under Sally Crawford’s Remuneration Committee that is not reliant on improving share performance. These are conditions that induce a Board to resist a sale, not seek one out and negotiate it diligently.
I strongly believe that without my intervention, the Company’s approach to financial and operational performance would continue to decline further destroying shareholder value. By adopting the proposals we strengthen Abcam’s position to negotiate a strategic transaction.
If I am voted back on to the Company’s Board, I fully intend to lead a Strategic Review Committee of independent directors which would ensure M&A opportunities are looked at thoroughly and the Company appropriately acts to maximise shareholder value.
Board increasingly lacks a shareholder mindset
Abcam has long been an M&A target, but the lack of shareholder mindset has resulted in an extensive track record of failing to pursue strategic M&A opportunities.
It is frustrating that shareholders have had to endure significant share price depletion while the management team at Abcam has paid themselves so handsomely. Clearly, management has an incentive to stay entrenched rather than create shareholder value.
In their Circular on 16 June, Abcam asserted that recent M&A enquiries were likely due to the recent publicity around the upcoming extraordinary general meeting (EGM). While my calling of an EGM shone a light on the material weaknesses and no doubt increased interest in the Company, the share price increased, which I interpret to show confidence in the promise of my return to the Board and in my plan for value creation. The Board and management are now attempting to use M&A as a distraction. With essentially no shareholder representation at Board level, there is no incentive for them to act in the best interests of shareholders including, but not limited to, engaging with potential bidders. Moreover, the Board and management’s record of poor execution has undoubtedly adversely impacted the quality and quantity of any bids for the Company.
I will work with the Board on M&A to achieve the best value
To the detriment of shareholders, the Board has contended that I would oppose an M&A process if I was re-elected onto the Board. This is simply untrue. As noted above, I would benefit from a successful sale. Rest assured, I would support any sale or merger of Abcam that maximises value for all shareholders. Shareholders deserve a Board that will take the steps to realise shareholder value. Should I be elected Executive Chairman, I would make sure the Board engages productively with qualified bidders. I believe that the Board needs a major shareholder at the table to hold the Board and management accountable. A successful acquisition at an attractive price is far more likely if I am elected to the Board than if I am not.
My efforts to restore financial and operational performance and plan to maximise value for all shareholders are not only a defence against low M&A offers, but a commitment to act in the best interests of all shareholders. Should an acquisition be the best path forward for Abcam to cement itself as the world leader in antibodies and protein research tools, I will work with the Board to make that happen.
Vote to support my plan for value creation
I implore shareholders to not be misled by the entrenched Board and elect me to the position of Executive Chairman and vote for the proposals outlined below.
The proposals include:
1.The removal of Peter Allen, Michael Baldock, and Sally Crawford from office as Directors of the Company
2.The removal of any Director of the Company appointed after the Company’s receipt of the request to convene an EGM and before the occurrence of the meeting
3.The election of Jonathan Milner as a Director and appointment as Executive Chairman of the Board
4.A shareholder resolution to the Board to conduct a thorough search for candidates and appoint at least two other independent, highly qualified Directors to the Board promptly after the meeting
5.Company reimbursement of expenses of Jonathan Milner and affiliates incurred in connection with the foregoing matters
Thank you for your support and consideration. For more information please visit https://abcamfocus.com/.
Best,
Jonathan Milner
Source:
https://www.sec.gov/Archives/edgar/data/1492074/000110465923074198/tm2319464d1_ex99-14.htm