Affymetrix rejects $1.5-bn takeover bid from Origin Technologies
21 March 2016
Affymetrix, a maker of advanced genetic analysis technology, yesterday rejected a $1.5-billion takeover bid from Origin Technologies and opted to go ahead with its planned sale to Thermo Fisher Scientific for $1.3 billion.
In early January, Thermo Fisher, the world's largest maker of scientific instruments, had struck a friendly $1.3-billion cash deal to buy Affymetrix , in order to strengthen its biosciences and genetic analysis business. (See: Thermo Fisher to buy Affymetrix for $1.3 bn)
Thermo Fisher offered to pay $14 per share amounting to a 52-per cent premium to Affymetrix's 8 January closing price of $9.21. Affymetrix shares have risen by around 52 per cent since Thermo Fisher made its offer.
Last week, Origin Technologies, a company owned by former executives of gene testing and analysis provider Affymetrix tabled a $1.5-billion competing offer for the company, a move that was aimed at derailing an already agreed deal with Thermo Fisher.
Origin is owned by a former Affymetrix executives including Dr. Wei Zhou, who was the vice president of intellectual property and advanced technology in California-based Affymetrix
Origin had offered to pay $16.10 per share in cash, a 14.8-per cent premium to Affymetrix's closing price on 18 March, and 15 per cent higher than Thermo Fisher's offer.
Origin was formed with the sole aim of acquiring Affymetrix, which it planned to merge with Centrillion Technology Holdings Corp, a Palo Alto-based genomic technologies company founded by Dr. Zhou in 2009,
Affymetrix said that while reviewing the proposal, it noted that Origin is newly-formed shell company with no assets, and whose sole source of funding for the deal is debt commitments.
Based on the analysis performed by Affymetrix' advisers, Origin's $1.5 billion takeover offer ''falls materially short of the funds that would be required to complete the transaction, including the amounts required to be paid in respect of existing shares, employee equity arrangements, existing convertible notes and credit facility, and anticipated transaction expenses, including a termination fee payable to Thermo Fisher.''
The Affymetrix board concluded that the proposal does not constitute, and could not reasonably be expected to lead to, a ''Superior Proposal.''
Affymetrix also said that it had held preliminary discussions with potential backers of Origin last year and invited them to submit a written proposal, but heard nothing further from them for over four months until they announced their unsolicited proposal on 18 March.
Affymetrix added that it continues to recommend to its stockholders the merger agreement with Thermo Fisher.
Affymetrix's technologies enable multiplex and simultaneous analysis of biological systems at the cell, protein, and gene level, facilitating the rapid translation of benchtop research into clinical and routine use for human health.
Its customers include the pharmaceutical, diagnostic, and biotechnology companies as well as leading academic, government, and non-profit research institutes.
The California-based company has manufacturing facilities in Cleveland, San Diego, Vienna and Singapore, and employs around 1,100 people.
Waltham, Massachusetts-based Thermo Fisher specialises in the field of scientific machinery for health-care services, as well as providing chemicals and medical services for hospitals and scientific research.
It has annual revenues of $17 billion and employs around 50,000 people in 50 countries.