Affymetrix to Enter Talks With Origin After Takeover Bid Boosted

  • Affymetrix continues to recommend agreement with Thermo
  • Origin Technologies increased offer to $17 a share on Tuesday

Affymetrix Inc., the DNA-testing company at the center of a takeover battle, said it will enter talks with Origin Technologies Corp. after the suitor boosted its offer to $17 a share.

Origin needs to outline specific terms of its bid and provide copies of financing documents, as well as details on plans to obtain regulatory approvals including from the Committee on Foreign Investment in the U.S., Affymetrix said in a statement dated Wednesday. There’s no certainty on the outcome of any talks, and Affymetrix hasn’t determined the Origin proposal is superior, according to the statement. 

Affymetrix’s board continues to recommend Thermo Fisher Scientific Inc.’s $14-a-share purchase agreement, reached in January. It will delay the vote that was scheduled for Thursday until March 31, in order to review Origin’s raised bid, it said in a separate statement earlier Wednesday. It rejected Origin’s previous offer of $16.10 on Sunday, calling the bidder a “newly-formed shell entity” whose sole source of funding the acquisition is potential debt commitments.

Thermo Fisher said it still expects Santa Clara, California-based Affymetrix will decide that its merger agreement is the better offer. However, Thermo Fisher wouldn’t hesitate to end the agreement and get its termination fee if Affymetrix went for Origin, Chief Executive Officer Marc Casper said in a statement.

Speier Contributions

Origin’s bid has also drawn concern from a San Francisco congresswoman who cited the company’s ties to the Chinese government. On Tuesday, Representative Jackie Speier, a Democrat, asked the government to assess the national security risks of its proposal, since Affymetrix contracts with federal agencies, including the Defense Department.

According to the Center for Responsive Politics, Thermo Fisher’s political action committee donated at least $4,500 to Speier in 2016 and also has contributed to previous campaigns. She has raised more than $310,000 in this year’s election cycle.

“As a member of both the House Armed Services and House Intelligence Committees, I am well acquainted with the issues that China has been posing when it strategically acquires U.S. companies,” Speier said in an e-mailed statement. “This potential acquisition raises genuine national security concerns.”

Former Executives

Affymetrix shares rose 5.2 percent to $15.11 at the New York close, signaling that some investors expect Thermo Fisher may increase its bid. Thermo Fisher’s $14 offer in January was 52 percent above Affymetrix’s share price at the time.

“It appears Thermo will not raise its offer, and expects its standing offer will prevail,” Eric Criscuolo, an analyst at Mizuho Securities, said in a note to investors.

In its statement on Wednesday, Affymetrix explained the vote delay by saying that failure to engage with Origin could be inconsistent with the board’s duties.

Origin Technologies is owned by a group of former Affymetrix executives led by President Wei Zhou, who had been the vice president of intellectual property and advanced technology. The group has fully committed acquisition financing from SummitView Capital, according to its proposal.

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