NEW YORK (GenomeWeb News) — Nanogen's plan to buy diagnostics firm Elitech is unlikely to happen as certain closing conditions for the deal probably won't be met by March 31, 2009, Nanogen said today.
San Diego-based Nanogen said the companies have agreed to allow Nanogen the right to consider alternatives to the reverse acquisition, which was valued at €66.5 million ($98.5 million) when the companies forged the plan in August 2008.
The intent of the merger, which was expected to close in the first quarter, was to combine Nanogen's molecular and point-of-care diagnostics with Paris-based Elitech's global manufacturing, sales, and distribution of in vitro diagnostics products.
Nanogen now believes that it will not get the nod from its stockholders or, "given the current financial market conditions," the companies will not have an acceptable agreement by the end of March, which was a closing condition of the deal. If the merger fails to close by that date then both companies will have the right to terminate the share exchange.
Nanogen said it has waived Elitech's obligations to prepare audited and unaudited financial statements for Nanogen to file with the US Securities and Exchange Commission for stockholder approval. Elitech instead has agreed to "use reasonable commercial efforts to prepare such financial statements and may suspend or terminate such preparation if it deems it commercially reasonable to do so."
Nanogen said that it will "actively explore alternatives," such as a restructured deal with Elitech, a deal with another company, or a sale of assets or a "significant" equity infusion.
The company also said that its failure to begin soliciting stockholder approval by Feb. 1 will reinstate obligations it has from 2007 and 2008 convertible note agreements to make interest and redemption payments that are currently deferred.
In early trade on the Nasdaq, shares of Nanogen traded down 20 percent at $.16 per share.