Financial Times 17-10-2001 

Shares setback for Huntingdon Life Sciences
By PATRICK JENKINS

Huntingdon Life Sciences suffered a severe setback to its future as a public company yesterday when the last US marketmaker backing trading in the company's shares withdrew its services. 

Fleet Securities confirmed it would no longer be making a market in HLS, following a similar decision by National Securities 10 days ago. Both had been targeted by Shac USA, the US arm of animal rights group Stop Huntingdon Animal Cruelty. 

Over the past two months, a further six market-makers - Herzog, Heine, Geduld Inc; Wein Securities; GVR Co; Hill Thompson Magid & Co; Ladenburg, Thalmann & Co; and WMV Frankel & Co - had been pressured into ceasing dealing in HLS shares, Shac said. 

It is only a week since HLS announced plans - due to be complete by the end of the year - to delist its shares in the UK and restructure itself under a new US parent, Life Sciences Research. 

Andrew Baker, HLS chairman, said at the time: "This transaction should facilitate a more open and liquid trading platform for our investors." 

HLS remained bullish yesterday. "Marketmaking is an old-fashioned concept. It doesn't mean anything these days. The shares will continue to be tradeable via the Nasdaq over-the-counter bulletin board system, with backing from ECNs," it said. 

ECNs - electronic communications networks - link buyers and sellers of stock without human intervention. 

However, marketmakers and stockbrokers backed Shac's opinion that the withdrawal of marketmaker support would scupper HLS's plans to use the US as a new base for stock liquidity. One marketmaker said: "Without marketmaker attribution, there's basically no market for the stock." 

Fleet said: "We were doing no volume in HLS anyway, and we'd had customer complaints. So it was giving us no income and a lot of hassle." 

The move is a repeat of HLS's experience in the UK earlier this year when marketmakers and private client stockbrokers withdrew from trading the company's shares. The resultant constraint on trading liquidity was one of the reasons behind HLS's decision, announced a week ago, to delist its shares in the UK and focus on the Nasdaq OTC market. 

Shac USA said that potential liquidity was now "incredibly diminished". 

The protesters spent the past two months sending letters, e-mails and videos to traders and executives at the marketmaking companies and their clients. 

Separately, the company confirmed that the mystery Dollars 1.5m (Pounds 1.02m) capital raised when HLS announced its restructuring was fronted by Walter Stapfer, a Swiss accountant with executive experience at UBS and L'Oreal.