The Successful Investor Hotline – Friday, April 4, 2014

Article Excerpt

NORDION INC., $12.46, Toronto symbol NDN, sells isotopes for cancer detection and research. It also makes products that sterilize food and surgical tools. The company has accepted a friendly takeover offer from Sterigenics, a private, Illinois-based firm that sterilizes surgical tools, pharmaceutical ingredients and other materials. Sterigenics will pay $11.75 U.S. (or $12.90 Canadian) for each Nordion share. Two-thirds of Nordion’s shareholders must approve the deal, but Sterigenics aims to close it in the second half of 2014. If Nordion accepts a higher offer or cancels the agreement, it will have to pay Sterigenics a $12-million U.S. break fee. To put that in context, Nordion earned $36.5 million U.S., or $0.59 U.S. a share, in the three months ended January 31, 2014. If Sterigenics cancels the takeover, it will pay Nordion $24 million U.S. The stock is trading below the offer price, which indicates that investors do not expect a higher bid. That’s partly because Ottawa won’t let investors from outside Canada own more…