An MDS Nordion employee. Source: www.canada.com

A N.Y. hedge fund wants to break up MDS, owner of MDS Nordion of Ottawa, to increase the price of the Toronto medical sciences company stock.

Obrem Capital said Wednesday in a U.S. regulatory filing that it bought 6.2 million MDS shares, or 5.1 percent of the company, because it believes they are "undervalued and represented an attractive investment opportunity," according to a report in the Ottawan Citizen.

Obrem now owns $125 million in MDS stock after the six-week buying spree and said it could buy more of the company, which has a $2.5 billion market capitalization, the Citizen reported.

The hedge fund said that Obrem investors “believe that significant shareholder value could be created through the spinoff or sale of one or several of [MDS]'s business units and they intend to recommend that [MDS] formally hire financial advisers to explore such strategic alternatives.”

MDS said in a statement at a recent meeting with Obrem that, "we listened to their views, and continue to believe that MDS is on the right path to create value for our shareholders,” according to the Citizen.

The Citizen also reported that Obrem Capital is headed by Andrew Rechtschaffen, a Wall Street veteran of several hedge funds, who set up the investment bank a year ago.

If MDS were to put Nordion on the market, some U.S. pharmaceutical companies might be interested in the company because of the widespread awareness of U.S. vulnerability when Nordion isotopes were cut off to U.S. hospitals, the Citizen reported.

MDS also makes medical diagnostic equipment and performs contract drug development work for clients.

The Citizen predicted that if Obrem hopes to shake up MDS, it would likely need the support of other investors.