Khan to raise Biota takover offer

An embarrassing oversight has forced a listed company controlled by self-styled "corporate rationaliser" Farooq Khan to lift its takeover offer for biotech Biota Holdings.

In a market announcement on Wednesday, BigShop.com.au said it would have to raise its conditional offer of 15 BigShop shares for every Biota share made earlier this week if its bid proceeds.

The new offer would swap 25 BigShop shares for every Biota share.

The change of heart was dictated by a Corporations Act requirement compelling BigShop to match the highest price it paid for Biota shares over the past four months as it amassed a 9.5 per cent stake in the company.

In that period, it paid up to 57 cents a share, compared with the 34.5 cents per share at which its original scrip offer valued Biota. BigShop's own shares currently are trading around two cents.

The supplemented bid comes on the eve of Biota's November 1 annual general meeting which Khan may use to confront the company's board over its rejection of his bid as inadequate and its denial of his request for board seats.

BigShop has not yet made a formal offer to Biota's shareholders.

Its case may not be helped by assessments from the analyst community which basically agree with Biota's board that Bigshop's current bid does not contain any value-add for Biota shareholders.

One recent analysis contended that BigShop had a negative operating cash flow of $300,000 in its most recent quarter and only $1.3 million in cash.

By contrast, Biota had $30 million in the bank on June 30, a situation which has led Biota's directors to label Khan a cashbox raider.