another Globe and Mail article :
TLC shares soar on consolidation trend
Laser surgery firms make move to merge
LEONARD ZEHR
BIOTECHNOLOGY REPORTER
Thursday, January 18, 2001
TLC Laser Eye Centers Inc. stock rallied 25 per cent yesterday as
investors bet the company would be the big winner from continuing
consolidation in the battered laser eye surgery sector.
The stock rose 76 cents to $3.75 on the Toronto Stock Exchange,
following a gain of 11 per cent Monday when Icon Laser Eye
Centers Inc. offered $24-million in stock to acquire a competing price
discounter, Lasik Vision Corp.
TLC shares have more than doubled since hitting a 52-week low of
$1.67 last week when the company reported a loss of $28-million
(U.S.) or 74 cents a share for the second quarter ended Nov. 30, 2000.
Twelve months ago, as a price war in eye surgery took hold, TLC's
stock price collapsed from a high of $28. Widespread price discounting
also pushed the company, which refused to cut its prices, into the red.
"We've always postulated that a lot of these discounters can't survive at
the prices they're charging," Charles Olsziewski, an analyst with UBS
Warburg LLC, told Dow Jones this week.
"Maybe people are starting to see that the scenario we've been painting
is starting to come to fruition -- that these discounters are either going to
consolidate under the weight of their own economic model, or just go
out of business," he added.
In a new research report, Mr. Olsziewski said TLC's operating results
for the second quarter may "represent the trough in both refractive
procedures and bottom-line losses."
Citing a pickup in surgical procedures in January and TLC's program to
cut costs, he predicted the Mississauga-based company should return to
the black by the fourth quarter ending May 31, 2001.
Mr. Olsziewski rates TLC a "strong buy," with a 12-month target price
of $20.
Vancouver-based Lasik Vision, which initiated the price war in laser
vision correction more than a year ago, declined comment on Icon's
offer to purchase its 39.3 million shares for 60 cents (Canadian) each in
new Icon stock.
"We have reviewed this unsolicited proposal, which is not a formal
offer," Lasik Vision chairman Hugo Sutton said in a statement. "If an
offer is received, the board will review that offer and make a
recommendation . . . at that time."
On the Canadian Venture Exchange yesterday, Lasik Vision lost 1 cent
to 39 cents.
One analyst, who asked not to be identified, suggested investors are
placing a steep discount on the value of Icon's stock, which fell 18 cents
(U.S.) to 55 cents, also on the CDNX.
Among other things, the offer is subject to restructuring Lasik Vision's
debt with a laser manufacturer in the United States, terminating a cash
injection from a director that would transfer control of the company,
waiving Lasik Vision's poison pill, and due diligence. |
