Group of Ex-Affymetrix Executives Reaffirms Commitment to Buyout Offer--Update
March 21 2016 - 2:59PM
Dow Jones News
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)
Copyright (c) 2016 Dow Jones & Company, Inc.
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