AgriBioTech Plunges After Failed Search for Buyer (Update1) (Adds comments from conference call, updates share price)
Las Vegas, Jan. 25 (Bloomberg) -- AgriBioTech Inc. shares fell as much as 27 percent after the turf and forage seed company said its three-month hunt for a buyer ended in failure.
The shares fell 3 1/16 to 9 in early afternoon trading. They traded as low as 8 3/4, their lowest intraday price since 7 3/4 on Oct. 8.
The unprofitable Las Vegas-based company said late Friday it dropped its effort to find a buyer after a failed auction by Merrill Lynch & Co.
On Nov. 10, Chief Executive Johnny Thomas predicted the ''bidding process'' would produce ''a new share valuation likely to be in the $25 to $50 per share price expectation range of analysts who are current on ABT fundamentals'' by the end of January. His prediction, first posted on the company's web site, has been repeated in regulatory filings as recently as Friday afternoon.
Thomas said on a conference call today the company will now integrate the 33 businesses it has acquired since 1995. It will no longer focus on acquisitions, he said. ''The integration of the businesses and other financial measures will free up more cash,'' Thomas said. ''our cash needs have largely been met,'' he said. ''Depending on a couple of decisions we have to make we might need to raise $5 million to $40 million,'' he added.
Thomas said a previously announced restructuring charge in 1999 ''could actually go a little above'' the $15 million maximum announced earlier.
While it tried to sell itself, the company's financial condition deteriorated. Production costs and interest expense ran higher than expected. Recently, it ran short of cash.
Two weeks ago, AgriBioTech revealed it was issuing stock to pay some bills. It gave 22,000 shares of stock to its securities law firm, Snow Becker Krauss P.C. to settle a $367,125 legal bill, and used 37,913 shares to pay $500,000 owed to Budd Group, a landscaping, security and janitorial service company owned by one of its directors.
AgriBioTech shares were cut to ''market perform'' from ''buy'' at Stephens Inc. and to ''buy'' from ''strong buy'' at Piper Jaffray Inc. |
