Affymetrix Rejects $1.5 Billion Origin Bid, Favors Thermo

  • Board cites concerns over Origin's assets, financing
  • Turned-down bidder was formed by ex-Affymetrix executives

Affymetrix Inc. said its board rejected a $1.5 billion acquisition bid from Origin Technologies Corp. and instead continues to recommend its previously planned merger with Thermo Fisher Scientific Inc.

Origin’s cash offer of $16.10 a share made on March 18 is inadequate, DNA-testing company Affymetrix said in a statement Sunday. “Origin appears to be a newly-formed shell entity with no assets of which Affymetrix is aware, and whose sole source of funding for the proposed transaction is $1.5 billion in potential debt commitments,” Affymetrix said in the statement.

Thermo Fisher in January agreed to buy Affymetrix for $14 a share in cash, more than 50 percent above its closing price before the offer was made public. Adding Affymetrix’s products will help Thermo Fisher expand its array of laboratory equipment, which also includes diagnostic tools for hospitals and mass spectrometers for chemists.

The $1.5 billion of funding from Origin “falls materially short” of the amount needed to complete the deal, and the company’s proposal “could not reasonably be expected” to result in a superior offer, Affymetrix said.

“The board of directors of Affymetrix is firmly committed to carrying out its fiduciary duties and maximizing value for our stockholders, while at the same time complying with the customary provisions of our merger agreement with Thermo Fisher,” Chief Executive Officer Frank Witney said in the statement.

Thermo Fisher Chief Executive Officer Marc Casper, in a statement and letter to shareholders, said the Origin bid relies on “a vague and insufficient financing package from a Chinese firm” and probably would be blocked by regulators because of Affymetrix’s work for the U.S. government.

Media contacts for Origin at Sard Verbinnen & Co. didn’t immediately respond to an e-mail requesting comment.

Origin Technologies is owned by a group of former Affymetrix executives including Wei Zhou, who had been the vice president of intellectual property and advanced technology. The company was formed specifically to acquire Santa Clara, California-based Affymetrix, which produces technology used by scientists and biologists to analyze specimens at the cellular and genetic level.

Before it's here, it's on the Bloomberg Terminal.