NEW YORK (GenomeWeb) – Origin Technologies Corporation, founded by former Affymetrix executives for the purpose of purchasing the company, proposed today to acquire Affy for $16.10 per share in an all-cash transaction valued at approximately $1.5 billion.
The proposal comes about a week before Affy shareholders are scheduled to vote on a different deal, Thermo Fisher Scientific's proposed acquisition of Affy for approximately $1.3 billion, which the boards of directors of both firms unanimously approved in January.
According to a letter sent by Origin to Affymetrix today, its proposal represents a 75 percent premium to Affymetrix's unaffected closing share price of $9.21 on the last trading day prior to the announcement of Thermo Fisher's proposed acquisition.
Fully financed by SummitView Capital, Origin said its all-cash offer represents a 15 percent premium for Affy stockholders relative to the proposed transaction with Thermo, under which stockholders would receive $14.00 per share in cash.
As part of the offer, Origin also pledged to fund payment of the $55 million termination fee that would be due to Thermo under the terms of Thermo and Affy's January agreement.
Wei Zhou, president of the newly formed Origin, wrote in the letter to Affy today that Origin strongly believes that its offer is superior to Thermo's based on several criteria.
First, it offers substantially higher value to Affy's stockholders, he said. Additionally, Origin believes it is in a better position to help Affy achieve its potential as a standalone, global company focused on genomics and proteomics. The deal would also offer an opportunity to acquire new technologies in the complete human genome sequencing space, Zhou wrote.
If the Origin-Affy merger goes through, Origin would have a separate option of combining with another company founded by Zhou in 2009, Centrillion Technology Holdings Corporation.
Zhou described Centrillion as possessing intellectual property for a genomic analysis technology supporting "an array of solutions, from targeted sequencing to 3D gene expression." He further described the company's platform as "a new generation of sequencing-compatible DNA chips, which combine the high density of first-generation chips with the high-quality probes of more recent innovations."
Analysts noted this afternoon that there appears to be room for Thermo to increase its own offer to counter the new Origin proposal while still getting a good deal. The company could also potentially prevail against the new bid on the grounds that its existing offer is less risky.
In Friday trade on the Nasdaq, shares of Affymetrix closed up 14 percent at $15.99, while shares of Thermo Fisher finished up around 1 percent at $140.