The CEO of Vancouver biotech firm QLT Inc. said he has had no communication from a large shareholder that is proposing to replace most of the company’s board of directors.
There has been “not a peep” from Danish-based NB Public Equity KS, which indicated in a regulatory filing earlier in the week that it wants a new slate of directors, QLT chief executive Bob Butchofsky said in an interview Friday.
“It is quite strange,” Mr. Butchofsky said. “It really appears that this is just an attempt for them to take control of the company without paying for it.” NB has not put forward any plans for QLT, or publicly released its list of proposed directors, he said.
QLT has postponed its annual meeting, which was to take place on Thursday, until June 4, to give shareholders more time to absorb the dissidents’ proposal.
NB is QLT’s second largest shareholder with 15 per cent of the company’s stock. It has at least one other major shareholder with a 5 per cent holding on it side.
In its filing, NB said a change on the QLT board is “important and necessary.” In an e-mail, NB managing director Cora Madsen said the organization could not comment further for legal reasons, but that it was “disappointed” that the annual meeting was postponed.
Mr. Butchofsky said he has been trying to communicate with other large shareholders to get them on side. He said he has talked briefly to QLT’s largest shareholder, New York hedge fund Axial Capital Management, but “we have not really had what I would call any kind of substantive dialogue with them.”
In order to get shareholders on side QLT issued an outline of its corporate strategy going forward, making it clear its top priority is a new drug it is developing for retinal diseases. It also said it will return $75-million to $100-million of capital to shareholders through a Dutch auction.
Mr. Butchofsky said QLT decided to propose the return of capital because “we clearly recognize we don’t own the company and there is a large block of shareholders who are signalling to us that a return of capital is appropriate.”
Analyst Philippa Flint of Bloom Burton & Co. in Toronto said in a note that she would have preferred to see the company use its cash to further existing programs or to acquire other assets.
“While the proposed Dutch auction may satisfy dissident shareholders, we would prefer to see QLT continue its focus on generating attractive returns for shareholders by developing its products and subsequently increasing the value of the company, rather than a short-term focus on returning capital,” she said.