BATTLE-SCARRED drug developer Biota is preparing for more conflict, with an aggrieved long-time shareholder seeking a position on the board at the annual meeting on Wednesday.
Melbourne doctor Michael Montalto has nominated for a position on the board of the company that earlier this year settled a bruising legal encounter with its licensing partner GlaxoSmithKline for just $20 million after earlier claiming it could win several hundred millions dollars in the action.
But company chairman John Grant is using proxy votes to try to scupper Dr Montalto's campaign, announcing to shareholders on Friday that he would cast undirected proxy votes against Dr Montalto despite an earlier statement that he would vote all proxy votes in favour of all resolutions.
Mr Grant's actions give shareholders who have cast a proxy vote little chance to change their preference, with a notice to the Australian Securities Exchange setting a deadline of 10am today.
Dr Montalto, a member of the Australian Shareholders Association, has established a blog as part of his campaign to join the board, and used it on the weekend to attack the change of position on the casting of proxy votes.
"The company has thus again demonstrated it's contempt for its small holders, the very holders that have supported the company throughout its turbulent past," he wrote.
In an earlier post, Dr Montalto identified the reasons for his frustration with the current directors. Most involved the company's handling of litigation against GSK, which it accused of not using its "best endeavours" in marketing the Biota-created anti-viral Relenza.
Dr Montalto estimated the litigation had cost about $30 million, and a rejection of an earlier GSK settlement offer meant the company missed out on $90 million.
The renegade shareholder has proposed cancelling the buyback of 5% of the company's shares that started in February. Mr Grant himself has announced his intention to step down from the board during this financial year, while board member Barbara Gibson will retire at the end of 2008.
Dr Montalto said the company's constitution allowed for up to nine directors, and with five non-executive directors on the board it meant his election only required a greater number of shareholders to vote in favour than to vote against him.
Last week Biota shares closed at 34¢, down 74% since March.
BTA Price at posting:
34.0¢ Sentiment: Sell Disclosure: Not Held
