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BGI Extends Offer for Complete Genomics as Illumina Continues Pursuit

NEW YORK (GenomeWeb News) – BGI-Shenzhen today said that it has extended its offer to acquire Complete Genomics for around $118 million until midnight New York City time on Dec. 14.

BGI's tender offer to acquire all of the shares of Complete Genomics was previously scheduled to expire today. As of the close of business last night approximately 15.4 million shares of Complete Genomics' common stock, or 44 percent of its outstanding shares, were tendered and not withdrawn.

The extension of the offer last night coincided with a letter Illumina sent to Complete Genomics' board of directors urging them to reconsider Illumina's offer to acquire the firm for around $123 million. Earlier this week Illumina confirmed that it had made an unsolicited offer of $3.30 per share to acquire Complete Genomics. That offer is 5 percent higher than the price agreed between BGI and Complete Genomics.

Complete Genomics turned down Illumina's offer saying that it would likely be turned down by regulators and didn't constitute a superior offer.

In the letter sent to Complete Genomics' board yesterday Illumina President and CEO Jay Flatley said that he was disappointed that Illumina's offer had been turned down and that he believes Complete Genomics' shareholders would agree that the Illumina's offer is superior to that of BGI.

"With respect to antitrust approvals, we are confident that our proposed transaction would be approved, and raises fewer regulatory concerns than the proposed BGI transaction," Flatley wrote. "In light of that, we cannot comprehend how your board of directors could rationally come to the conclusion that our proposal is not superior to BGI's proposal, or how the rejection of our proposal without discussion could satisfy your board's obligation to the shareholders of Complete Genomics."

Flatley further pointed out that US regulatory clearance of the deal with BGI has not yet been obtained and pointed to concerns the Committee on Foreign Investment in the United States may have regarding Complete Genomics being acquired by a foreign state-owned entity.

"As you may be aware CFIUS reviews of transactions involving state-owned entities have been problematic, and several transactions have been abandoned rather than be subjected to a Presidential order to unwind the transaction," said Flatley.

He further questioned Complete Genomics' assertion that BGI would be better positioned to proliferate its sequencing technology in the marketplace, saying that this suggestion "reflects a lack of understanding of Illumina's intentions and the competitive market dynamics." Flatley added that the combination of the firm's technologies would result in "higher quality, more innovative products available at lower costs to consumers."

Flatley said that Illumina is prepared to enter into an agreement on substantially the same terms as that of the deal Complete Genomics signed with BGI, including the bridge financing. Such financing would be necessary given Complete Genomics' recent admission that without a cash infusion it would not have sufficient cash and cash equivalents to operate beyond Jan. 31, 2013.

Complete Genomics has not yet publicly commented on Illumina's letter.

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