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Law Firm Files Class Action Lawsuit Against Affymetrix

NEW YORK (GenomeWeb) – The law firm of Faruqi & Faruqi announced today that it has filed a class action lawsuit in the United States District Court for the Northern District of California on behalf of shareholders of Affymetrix in connection with the company's proposed sale to Thermo Fisher Scientific.

The law firm is alleging that Affy shareholders of record on February 18 have been harmed as the company and its board of directors have violated sections of the Securities Exchange Act of 1934. Namely, the law firm said in a statement, the preliminary proxy statement Affy filed with the Securities and Exchange Commission "provides materially incomplete and misleading information about the company and the proposed transaction." Specifically, Affy's proxy statement allegedly leaves out information on the financial analyses conducted by Morgan Stanley on the proposed sale, Morgan Stanley's conflicts of interest, and information related to Affymetrix's financial projections.

Further, according to the complaint, the proposed deal as written makes it virtually impossible for anyone but Thermo Fisher to make a competitive bid. "The proposed transaction includes a non-solicitation provision, a matching rights provisions, and a $55 million termination fee which essentially ensure that a superior bidder will not emerge, as any potential suitor will undoubtedly be deterred from expending the time, cost, and effort of making a superior proposal while knowing that Thermo Fisher can easily foreclose a competing bid," the law firm wrote.

Thermo Fisher made a bid to acquire Affy in January, offering $14 a share for the company for a total deal value of $1.3 billion. In March, a new company called Origin Technologies — founded by former Affymetrix executives for the purpose of purchasing the company — made a counter-offer of $16.10 per share, $1.5 billion in total, upping that bid to $17 per share a week later when Affy rejected the first bid. Affy then postponed a special shareholder meeting on the proposed sale to Thermo Fisher in order to consider Origin's second bid, though the board continued to recommend the Thermo Fisher deal.

Finally this week, Affy formally rejected Origin's second offer, and Origin withdrew its acquisition offer on Monday.

Faruqi & Faruqi is now soliciting Affy shareholders to find a lead plaintiff for the case.

Affy's shares dropped less than 1 percent to $14.02 in afternoon trading on the Nasdaq.

The company did not respond to a request for comment.