- Determines That Unsolicited Proposal
from Origin is Not Superior
- Recommends against Origin Proposal
- Board Recommends Stockholders Approve
Thermo Fisher Merger at March 31 Special Stockholder Meeting
Affymetrix, Inc. (NASDAQ: AFFX, “Affymetrix” or “the Company”)
today announced that the Company’s Board of Directors (the
“Board”), in consultation with its legal and financial advisors,
has determined that the unsolicited merger proposal submitted by
Origin Technologies Corporation, LLC (“Origin”) on March 22, 2016
does not constitute a Superior Proposal, as defined in Affymetrix’
merger agreement with Thermo Fisher Scientific Inc. (NYSE: TMO,
“Thermo Fisher”) and recommends against the Origin proposal
(“Origin Proposal”).
On March 23, Affymetrix announced that the Board determined the
Origin Proposal could reasonably be expected to lead to a Superior
Proposal. Since that time, the Affymetrix management team and its
financial and legal advisors have devoted extensive time and
resources to engaging with Origin. This included discussions with
Origin and its advisors, providing due diligence information to
Origin, negotiating the terms of a proposed merger agreement and
engaging in reverse due diligence on Origin and its financing
sources. On March 26, Origin indicated it was prepared to continue
to move forward only on the basis of the terms set forth in its
March 22 proposal, which contemplated a reverse termination fee of
$100 million, representing the maximum amount of recovery available
to Affymetrix if Origin were unable to obtain financing. Origin’s
financing is subject to obtaining certain regulatory approvals in
China. In addition, the reverse termination fee would not be
payable if a transaction with Origin were blocked by the Committee
on Foreign Investment in the United States (“CFIUS”).
The Board evaluated the terms of the Origin Proposal against the
terms of its agreement with Thermo Fisher on a risk-weighted basis.
While the Board found the $3.00 per share premium offered in the
Origin Proposal, taken by itself, to be attractive, after engaging
with Origin, the Board found the risks to initiating and
consummating a potential transaction with Origin outweighed the
potential benefit of a higher offer from Origin. These risks
include:
- execution risk related to third-party
financing,
- the need to obtain approval by
regulators in China to obtain third-party financing, including that
the termination fee that would be payable to Thermo Fisher would
not be onshore in the United States for at least several
weeks,
- enforcement risk against financing
sources in China that may not have significant assets in the United
States,
- the need to obtain CFIUS approval as a
condition to closing, along with the related issue that no reverse
termination fee would be paid to Affymetrix if CFIUS approval were
not obtained except in circumstances involving Origin’s failure to
comply with CFIUS conditions, and
- the risk that in the interim Thermo
Fisher, as indicated in its recent public statements and private
communications, would attempt to terminate its existing merger
agreement with Affymetrix, in which case Affymetrix shareholders
would lose the premium inherent in the Thermo Fisher merger and
Affymetrix' negotiating position with Origin would be
compromised.
Further, in consultation with its financial and legal advisors,
the Board determined that the $100 million reverse termination fee
in the Origin Proposal that would be Affymetrix’ sole and exclusive
remedy against Origin in the event of a financing failure was
inadequate when weighed against the material risk of Affymetrix
stockholders losing the premium present in the approximately
$1.5 billion equity value of the Thermo Fisher merger without
any reasonable certainty of achieving the incremental premium
proposed to be paid in a potential transaction with Origin.
Therefore, the Board determined the Origin Proposal does not
constitute a Superior Proposal and recommended against the Origin
Proposal.
"The Board is firmly committed to maximizing value for our
stockholders,” said Dr. Frank Witney, Chief Executive Officer and
President of Affymetrix. “The value, certainty and timing offered
by our existing agreement with Thermo Fisher—scheduled to close in
just a few days and which was a 52 percent premium to our
unaffected stock price on January 7, 2016 and approximately a 27x
multiple of our 2015 Reported EBITDA1—outweighs the putatively
higher premium but significantly greater uncertainties associated
with a potential transaction with Origin. We look forward to
putting the matter before our stockholders and proceeding with our
merger."
The Special Meeting of Stockholders will take place as scheduled
on March 31, 2016, to allow Affymetrix stockholders to consider
approval of the merger agreement with Thermo Fisher and related
matters. The boards of directors of both companies have unanimously
approved Thermo Fisher’s acquisition of Affymetrix at a price of
$14.00 per share in cash. Affymetrix remains subject to the merger
agreement with Thermo Fisher and the Company’s Board of Directors
reiterates its recommendation in support of Affymetrix’ merger with
Thermo Fisher.
Affymetrix stockholders are encouraged to vote for the proposed
merger with Thermo Fisher at the upcoming Special Meeting of
Affymetrix stockholders. Any questions related to the Special
Meeting should be directed to our proxy solicitor, Innisfree
M&A Incorporated, at toll-free, at 1-888-750-5834.
For additional information, please refer to Amendment No. 3 to
the Company’s Proxy Statement to be filed with the Securities and
Exchange Commission (the “SEC”).
Morgan Stanley is acting as financial advisor to Affymetrix, and
Davis Polk & Wardwell LLP and Richards, Layton & Finger, PA
are serving as legal counsel.
About Affymetrix
Affymetrix 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 and wellness. Affymetrix
provides leadership and support, partnering with customers in
pharmaceutical, diagnostic, and biotechnology companies as well as
leading academic, government, and nonprofit research institutes in
their quest to use biology for a better world. More than 2,300
microarray systems have been shipped around the world and more than
94,000 peer-reviewed papers have been published citing Affymetrix
technologies. Affymetrix is headquartered in Santa Clara,
California, and has manufacturing facilities in Cleveland, San
Diego, Vienna, and Singapore. Affymetrix has about 1,100 employees
and maintains sales and distribution operations worldwide. For more
information about Affymetrix, please visit www.affymetrix.com.
PLEASE NOTE: Affymetrix, the Affymetrix logo, and OncoScan
trademarks are the property of Affymetrix, Inc. All other
trademarks are the property of their respective owners.
Important Information for Affymetrix Stockholders
In connection with the proposed merger with Thermo Fisher,
Affymetrix has filed a proxy statement with the SEC. STOCKHOLDERS
ARE ADVISED TO READ THE PROXY STATEMENT (INCLUDING ANY AMENDMENTS
OR SUPPLEMENTS THERETO) FILED WITH THE SEC ON FEBRUARY 24, 2016
BECAUSE IT CONTAINS IMPORTANT INFORMATION. Stockholders may obtain
a free copy of the proxy statement and any other relevant documents
filed with the SEC from the SEC’s website at http://www.sec.gov. In
addition, stockholders will be able to obtain, without charge, a
copy of the proxy statement and other relevant documents at
Affymetrix’ website at investor.Affymetrix.com or by contacting
Affymetrix’ investor relations department via e-mail at
investor@affymetrix.com.
Affymetrix and its directors, executive officers and other
members of its management and employees as well as Thermo Fisher
and its directors and executive officers may be deemed to be
participants in the solicitation of proxies from Affymetrix’
stockholders with respect to the merger. Information about
Affymetrix’ directors and executive officers and their ownership of
Affymetrix’ common stock is set forth in the proxy statement for
Affymetrix’ 2016 Special Meeting of Stockholders, Affymetrix’
Annual Report on Form 10-K for the fiscal year ended December 31,
2015 and proxy statement for Affymetrix’ 2015 Annual Meeting of
Stockholders. Information about Thermo Fisher’s directors and
executive officers is set forth in the proxy statement for Thermo
Fisher’s 2015 Annual Meeting of Stockholders. Stockholders may
obtain additional information regarding the direct and indirect
interests of the participants in the solicitation of proxies in
connection with the merger, including the interests of Affymetrix’
directors and executive officers in the merger, which may be
different than those of Affymetrix’ stockholders generally, by
reading the proxy statement and other relevant documents regarding
the merger, which have been filed with the SEC.
Forward Looking Statements
All statements in this report that are not historical in nature,
are predicative in nature or that depend upon or refer to future
events or conditions are “forward-looking statements” within the
meaning of Section 21 of the Securities Exchange Act of 1934, as
amended, and the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are based on Affymetrix’ current
expectations and are subject to a number of factors and
uncertainties that could cause actual results to differ materially
from those described in the forward-looking statements. Affymetrix
cannot assure you that actual results or business conditions will
not differ materially from those projected or suggested in such
forward-looking statements as a result of various factors,
including, but not limited to, those relating to: the need to
develop new products and adapt to significant technological change;
implementation of strategies for improving growth; general economic
conditions and related uncertainties; dependence on customers’
capital spending policies and government funding policies; the
effect of exchange rate fluctuations on international operations;
the effect of healthcare reform legislation; use and protection of
intellectual property; the effect of changes in governmental
regulations; and the effect of laws and regulations governing
government contracts, as well as the possibility that expected
benefits related to the proposed transaction may not materialize as
expected; the transaction not being timely completed, if completed
at all; prior to the completion of the transaction, Affymetrix’
business experiencing disruptions due to transaction-related
uncertainty or other factors making it more difficult to maintain
relationships with employees, customers, licensees, other business
partners or governmental entities, difficulty retaining key
employees, and the parties being unable to successfully implement
integration strategies or to achieve expected synergies and
operating efficiencies within the expected time-frames or at all.
Additional important factors that could cause actual results to
differ materially from those indicated by such forward-looking
statements are discussed in “Risk Factors” contained in Part I,
Item 1A of our Annual Report on Form 10-K for the year ended
December 31, 2015. These forward-looking statements speak only as
of the date of the report. Unless required by law, the Company does
not undertake to release publicly any updates or revisions to any
forward-looking statements contained herein to reflect any change
in our expectations with regard thereto or any change in events,
conditions or circumstances on which any such statements are
based.
1 Reported EBITDA adds back the one-time litigation expense of
$10 million.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160328005610/en/
Affymetrix, Inc.Investor Contact:Doug Farrell,
408-731-5285Vice President, Investor
Relationsdoug_farrell@affymetrix.com
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