AFFX Affymetrix, Inc.

By Anne Steele 

A group of former Affymetrix Inc. executives on Monday reaffirmed its commitment to a $1.5 billion bid to buy the genetic-analysis company without raising its offer.

The group urged the board to engage with it after its offer was deemed not superior to the company's planned tie-up with Thermo Fisher Scientific Inc.

Origin Technologies Corporation LLC, a newly formed entity owned by former Affymetrix executives, said it is committed to completing a "friendly transaction" through a "significantly more attractive premium" than Thermo Fisher's proposal.

In January, Thermo Fisher said it would buy Affymetrix for about $14 a share, or roughly $1.3 billion, in a bid to boost its biogenetic-analysis portfolio.

Origin on Friday put in its unsolicited offer to take Affymetrix private for $16.10 a share in cash in a deal worth about $1.5 billion.

"In order to proceed with the transaction between Origin and Affymetrix, we require an opportunity to engage with the Affymetrix board of directors to address their concerns and complete confirmatory diligence, " Origin said in a news release Monday.

Shares of Affymetrix skidded 9.6% to $14.45 in recent trading. Before the January offer became public, Affymetrix's shares closed at $9.21.

On Sunday, Thermo Fisher said it agreed with Affymetrix and its board that Origin's offer didn't constitute a superior proposal.

"The proposal put forth to Affymetrix by Origin Technologies, a newly created shell entity relying on a vague and insufficient financing package from a Chinese firm, is highly uncertain and speculative and does not constitute, and could not reasonably be expected to lead to, a superior proposal," Thermo Fisher Chief Executive Marc Casper said in a statement Sunday.

He said Origin's offer didn't include any proposed merger agreement, is subject to numerous contingencies, including the completion of due diligence and receipt of external financing from Chinese investors and banks, "and has the strong potential for a prolonged--and likely unsuccessful--regulatory review."

On Sunday, Affymetrix issued a statement saying Origin's $1.5 billion offer "falls materially short of the funds that would be required to complete the transaction."

"We held preliminary discussions in the fall of 2015 with individuals who became principals and potential backers of Origin, and in November 2015 I invited them to submit a written proposal if they had serious interest in a strategic transaction with Affymetrix," said Affymetrix Chief Executive Dr. Frank Witney. "We heard nothing further from them for over four months until they announced their unsolicited proposal on March 18."

He said the board is firmly committed to carrying out its fiduciary duties while complying with the customary provisions of the merger agreement with Thermo Fisher.

In its Friday offer letter, Origin said it would pay the $55 million termination fee potentially owed to Thermo Fisher if its offer was accepted.

The four people running Origin formerly worked at Affymetrix as vice presidents, including a former general counsel and a head of molecular diagnostics research and development.

Write to Anne Steele at Anne.Steele@wsj.com

(END) Dow Jones Newswires

March 21, 2016 14:44 ET (18:44 GMT)

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