Market sources suggest a number of hypotheses about Omrix. One is that Johnson & Johnson (NYSE: JNJ), which markets Omrix's fibrin surgical sealant in the US, wants to buy the company. This hypothesis is not news to Omrix shareholders, but it has never been proved and seems unlikely given the tense relations between the companies. At Omrix's most recent conference call, founder president and CEO Robert Taub implied that Johnson & Johnson was not doing enough to market Omrix's products.Another recent hypothesis is that that Johnson & Johnson might sell its own wound treatment business. Investors have worried that Omrix's products might be sold together with the division, but Omrix says that its business of surgical sealants would get even greater exposure after a sale. Johnson & Johnson may be seeking a new source of growth for the division.
Taub, who owns 25% of Omrix, is a strong believer in the company and its strength. If that Johnson & Johnson does not buy it, the anticipated "big thing" might be Taub increasing his stake in Omrix, and possibly even delist it.
Pictured: Robert Taub, President and Chief Executive Officer of OMRIX Biopharmaceuticals, Inc., rings The NASDAQ Stock Market Opening Bell
Taub has told associates that Omrix will achieve a value of $1 billion, more than triple its current market cap of $300 million. The company has $82 million in cash and no debt, so Taub would need a net $143 million of his own money to buy out the other shareholders in the company. Obviously, if Taub makes a move on the company, its share price will presumably rise, possibly considerably, but the amount would still be within Taub's means with suitable leverage. He would also probably bring in a partner to any deal.
Omrix will publish its financial report for the second quarter on August 11, and the company's financials might also give its share a boost.
Published by Globes [online], Israel business news - http://www.globes-online.com/ - on July 20, 2008
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