Hedge fund manager says Nordion should be trading at $11 a share

NEW YORK Wed Feb 13, 2013 3:59pm EST

NEW YORK Feb 13 (Reuters) - Shares of Nordion Inc should rise significantly following the company's retention last month of an adviser to consider strategic options, which could include selling all or part of the life sciences company, a New York-based hedge fund manager said on Wednesday.

"We think you are sitting at $7 today, and it should be at $11 a share, and Jefferies is working hard to make that happen," Howard Shainker, who co-founded Bow Street Capital Management, said at the Harbor Investment Conference.

Bow Street Capital holds shares in Nordion. Shainker said the company was one of his best investment ideas, but he did not specify the size of his holding.

Nordion last month hired Jefferies & Co to consider strategic options.

The Canadian company has three main businesses but has been battered since one of those was put in jeopardy after losing an arbitration ruling.

It suspended its dividend in September after an arbitration panel rejected its claim for damages from state-owned Atomic Energy of Canada Ltd, the main supplier for its medical isotopes business.

Nordion's New York-listed shares on Wednesday were trading at $7.44. The shares had closed at $6.43 on Jan. 25, the last trading day before Nordion disclosed it had retained Jefferies.

Nordion is one of the world's leading producers of molybdenum-99, used in medical imaging, and it depends on raw material from AECL's aging facility in Chalk River, Ontario.

Shainker, who launched Bow Street after leaving Daniel Loeb's Third Point Capital, said he sees plenty of potential buyers for pieces or even all of Nordion's businesses, which include its sterilization business and a unit that specializes in liver cancer treatments.

"There are lots of strategic buyers," he said at the conference, where prominent hedge funds managers, including Bill Ackman and Andrew Feldstein, presented some top ideas.

Shainker said any potential spin-offs or purchases of Nordion assets might be initiated within six months.

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