Khan drops Biota takeover bid

Perth entrepreneur Farooq Khan has junked his plan to pursue a scrip-based hostile takeover of Biota Holdings Ltd.

But he’s sent a public letter to Biota’s board vowing to continue as a thorn in their side from his position as Biota’s largest shareholder.

Khan’s withdrawal of his proposed takeover comes almost a month to the day after he initiated face-to-face discussions with Biota directors in an attempt to force his way onto the board.

When they rejected his bid, Khan signalled that he would make a heavily conditional scrip offer which would allow Biota shareholders to swap their shares for stock in his listed shell Bigshop.com.au Ltd.

He also attacked the performance and pay of Biota directors and labelled their stewardship of Biota as “disastrous”.

On its side, the Biota board described Khan as a corporate raider whose main interest in the company lay with its $30 million cash reserves.

Analysts sniffed at the offer as undervalued and Biota claimed it was “farcical” and “flawed” and said it had wasted the company’s time, money and executive focus.

Subsequently, Khan failed to score any concessions at the company’s annual general meeting on November 1.

At that time, Khan said he would call a general meeting of shareholders at an unspecified time to press his claims.

In an open letter to Biota chairman John Grant following the withdrawal of his takeover bid, Khan left open the question of the general meeting. He said he would provide “further clarification in due course” about his intention to call the meeting.

The letter also said that as Biota’s major shareholder Khan remained committed to seeking board representation.