UPDATE 2-Medical isotope maker Nordion explores alternatives
* Hires Jefferies & Co as adviser for strategic review
* Suspended dividend in September after arbitration loss
* Dispute with supplier AECL moves into court
Jan 28 (Reuters) - Canada's Nordion Inc, a major provider of medical isotopes, said on Monday it has hired advisers to examine options for its future, sending its shares sharply higher.
The company said no decision had been made on a deal and it intends to continue with planned business activities during the strategic review.
Jefferies & Company will advise the company in the review.
Nordion suspended its dividend in September after an arbitration panel rejected its claim for damages from its main supplier, state-owned Atomic Energy of Canada Ltd.
Nordion is one of the world's leading producers of molybdenum-99, which is used in medical imaging, and it depends on raw material from AECL's ageing facility in Chalk River, Ontario. The plant has been operating since 1957, and while it is licensed to operate until 2016, its future beyond that is unclear.
The company had hoped to force AECL to pay damages or complete two new reactors that would have ensured a long-term supply of the radioactive material it needs.
Nordion has not given up that objective, and on Jan. 18 it filed an amended statement of claim against AECL in the Ontario Superior Court of Justice, seeking damages of $243.5 million for negligence and breach of the agreement on isotope production.
The company may be required to pay some of AECL's arbitration costs. It said in December that AECL put the arbitration cost at $46 million.
Nordion, which has also been looking for another source of moly-99, terminated a supply agreement with a subsidiary of Russia's State Atomic Energy Corp in October and said it would begin talks with a related Russian source.
But even if the negotiations result in a new deal, Nordion would obtain less material than previously thought, the company said then.
The stock rose 13.7 percent to C$7.31 in early trading on the Toronto Stock Exchange. Prior to Monday's gains, the shares had fallen 41 percent from a year-high of C$10.86 in September.
Nordion, which reorganized its business into two distinct units in September, also reported a fourth-quarter loss of $43.5 million, or 70 cents per share, compared with a profit of $6.9 million, or 11 cents per share, a year earlier.
Adjusted to exclude restructuring charges, arbitration and legal fees and other items, the company earned 34 cents per share, up from 30 cents a year earlier.
Revenue remained flat at $74.7 million. Nordion expects medical isotopes revenue to decline 20 percent in fiscal 2013.