GTC Biotherapeutics (fka GTCB)

[DewDiligence]

What it means to be a GTC minority shareholder:

June 1 has come and gone (barring an announcement in the next five hours). Thus, LFB may now—at its sole discretion—assume a majority stake in GTC. Moreover, by contractual agreement between LFB and GTC, LFB is not bound by the anti-takeover provisions of Massachusetts corporate law. Hence, after obtaining a majority stake, LFB can manage GTC as it sees fit and can offer to buy out GTC’s minority shareholders on terms of its choosing.

From GTC’s 2008 10K filing:

http://sec.gov/Archives/edgar/data/904973/000119312509040458/d10k.htm

We cannot assure that LFB will not seek to influence our business in a manner that is contrary to our goals or strategies or the interests of other stockholders. Moreover, persons who are directors of GTC and who are also directors and/or officers of LFB may decline to take action in a manner that might be favorable to us but adverse to LFB.

Form 8K filed 12/24/08 contains the agreement that renders the anti-takeover provisions in Massachusetts corporate law inapplicable to LFB:

http://sec.gov/Archives/edgar/data/904973/000119312508260052/dex42.htm

Whereas, on October 3, 2008, the Board of Directors of the Company authorized and directed the Company to amend the Rights Agreement to provide that LFB Biotechnologies… shall be a “Grandfathered Person” thereunder and, therefore, not an “Acquiring Person” thereunder, so long as LFB Biotech acquires all its beneficial ownership of shares of capital stock of the Company in one or more transactions whereby LFB Biotech is acquiring such beneficial ownership directly from the Company…

Bottom line for GTC investors and prospective investors: You are now effectively a minority shareholder with no protection from exploitation by the majority owner, LFB. If you continue to invest in GTC in spite of this, you deserve what you get.