After delaying a shareholder vote by one week so it could consider a $1.6 billion acquisition bid from former employees, the genetic analysis firm Affymetrix says an earlier $1.3 billion offer from Thermo Fisher Scientific is the better deal.
Following the rejection, the former employees have withdrawn their bid, all but assuring Thermo Fisher will get the nod to complete the purchase when Affymetrix shareholders vote on March 31.
Even though the former employees’ higher bid was attractive, Affymetrix’s board says, the deal might never have been completed for a number of reasons including dependence on financing from a private equity firm based in China, the need to obtain Chinese regulatory approvals for money transfers to pay for the deal, and likely difficulty in obtaining U.S. government approvals to complete the deal.
Thermo Fisher’s offer “outweighs the putatively higher premium but significantly greater uncertainties associated with a potential transaction” with the former employees, says Affymetrix CEO Frank Whitney.
The former employees had hoped to combine Affymetrix with Centrillion Technology, a Palo Alto, Calif.-based gene characterization firm the former employees now run. Wei Zhou, who leads Centrillion and Origin Technologies, a firm created earlier this month to make the acquisition, said the deal fell apart largely because of an “unrealistic” demand by Affymetrix that hundreds of millions of dollars be placed in a U.S. escrow account by March 28.
When Thermo Fisher CEO Marc N. Casper announced the deal in January, he said Affymetrix’s 1,000 employees and $350 million in annual sales would boost his firm’s role in gene analysis. Casper now says he is confident Affymetrix stockholders will support “our fully financed, all-cash merger.”