- Company continues to back a takeover by Thermo Fisher
- Affymetrix shareholders to vote on proposal on March 31
Affymetrix Inc., the DNA-testing company at the center of a takeover battle, recommended against an offer from Origin Technologies Corp. even though it’s higher than a proposal by Thermo Fisher Scientific Inc., citing concerns over approval from Chinese and U.S. regulators.
The risks of Origin’s $17-a-share offer outweigh the benefits, Affymetrix said in a statement Monday, sticking to its recommendation in favor of the takeover by Thermo Fisher. Origin, whose backer is a Chinese investment firm, needs approval by regulators in China to get third-party financing, Affymetrix said.
U.S. regulators would also review any proposed merger with Origin, another risk Affymetrix’s board cited, at a time when officials are scrutinizing more Chinese deals than ever. Among the latest examples, Western Digital Corp.’s plan to sell a stake of itself to Chinese investors fell apart in February after coming under a U.S. national security review.
Origin didn’t immediately respond to a request for comment. Thermo Fisher said it’s confident that Affymetrix shareholders will approve its offer in a vote scheduled for March 31.
The Affymetrix board said that losing Thermo Fisher’s deal was also a risk they considered. If that merger were to breakdown, Affymetrix would lose the premium that the original deal implied and would be in a weaker negotiating position with Origin. Thermo Fisher’s $14 a share offer in January was 52 percent above Affymetrix’s share price at the time.
Affymetrix shares fell 5.6 percent to $14.10 in New York.
Origin 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.