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Abcam Drops Takeover Bid for Horizon Discovery

NEW YORK (GenomeWeb) – Abcam announced today that it has rescinded its takeover bid for Horizon Discovery, and that it no longer intends to make any further offers for the company.

On May 2, the UK-based life science reagents and tools company said that it made a takeover offer for Horizon that valued the company at approximately £270 million ($367.4 million). The offer put a value of 181 pence per share on Horizon's stock, representing a premium of approximately 26 percent to Horizon's closing share price of 144 pence on May 1. The deal would have been satisfied by the issue of new shares in Abcam. Horizon's board rejected the offer.

Despite the rejection, however, Abcam said in a statement that it would continue to pursue "constructive dialogue" with Horizon, and that adding Horizon's extensive capabilities in gene editing to Abcam's business would help both firms to "expand their reach and influence globally."

On May 8, Horizon published its preliminary earnings results for 2017, reporting that its revenues rose 52 percent year over year, thanks largely to a 101 percent increase in product revenues. The company also noted in its earnings release that Abcam's offer "fundamentally undervalues Horizon" and that it sees "little strategic merit in the proposed combination."

In a statement today, Abcam said that taking that preliminary report and Horizon's views about the deal into consideration, it no longer intends to make an offer for the company.

"Abcam continues to execute on its vision to be the most influential life science company for researchers worldwide and remains committed to expanding its reach and influence globally," the firm said. "However, it has always been Abcam's intention to remain disciplined about value whilst working towards a transaction with the recommendation of the board of Horizon Discovery… Having considered those [preliminary financial] results and Horizon Discovery's statement ... that there is little strategic rationale to combining the two companies, Abcam confirms that it does not intend to make an offer for Horizon Discovery."

In a note to investors on Wednesday, Cowen analyst Doug Schenkel said that while this may not be the outcome some investors wanted, he still thinks Horizon is in good position to outperform given the progress the company has made in recent years.

"We also viewed the initial offer as too low," Schenkel noted, adding, "We still wonder if there is more to come here. It seems odd that Abcam would make an opportunistically low bid that it had to know had no chance of being accepted, make the bid public to try to drive further discussion, and a week later pull the bid (especially given the comment on results, which were largely known since February)."