Biosensors

Biosensors: Co has acquired remaining 50% of JW Medical Systems (JWMS) from HK-listed co Weigao Intl. The consideration paid is
1) $160m in cash,
2) the issuance of 260m new shares at $1.2215 each (0.1% prem to Biosensor’s last traded price) for a total of $317.6m
3) US$120m worth of 4% convertible notes (10% prem to co’s last traded price) due 2014. JWMS has NAV of $127.1m as of 31 Mar 2011 and the total consideration is $625.4...

The new shares issued is approx 16.2% of enlarged share capital and together with the convertible notes if converted will represent 21.6% of enlarged share capital. JWMS is one of the major China players for distributing and manufacturing drug-eluting stents and contributed 48% to co’s net profit as of FY2011...

Deutsche believes this dev allows Weigao to use Biosensors as a platform for future biz dev and there is a reasonable chance of a takeover in the future. More reports expected on Tues after co’s investor conference at 9pm today. Biosensors trades at fwd P/E of 17.0x and Weigao approx 37.2x fwd P/E in HK.