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Affymetrix Postpones Stockholder Meeting as Origin Ups Acquisition Offer; Board Backs Thermo Bid

NEW YORK (GenomeWeb) – In response to a negative reaction by Affymetrix to its initial acquisition proposal last week, Origin Technologies yesterday sent a revised proposal to acquire Affy for $17.00 per share, which Affy has determined could lead to a superior proposal to its existing merger agreement with Thermo Fisher Scientific.

Due to this possibility, the company has postponed until March 31 a special stockholder meeting that was to take place tomorrow, in which stockholders were to vote on Thermo Fisher's Jan. 8 bid to acquire the firm for $14 per share, or approximately $1.3 billion.

Despite the higher offer from Origin, Affy's board of directors continues to recommend that its stockholders vote in favor of the adoption of the merger agreement with Thermo Fisher.

Origin, a company formed by former Affymetrix executives for the purpose of buying the company, made a first bid to acquire Affy for $16.10 per share last week and said it would pay a $75 million termination fee to Thermo Fisher required to dissolve the merger agreement between Thermo Fisher and Affy.

At that time, Origin said it had $1.5 financing from Chinese private equity firm SummitView Capital to cover the deal.

Affy's board of directors rejected this initial offer, calling Origin a shell company, arguing the $1.5 billion would not be enough for the offer to be considered superior to Thermo Fisher's proposal, and raising questions about the conditionality of the deal and potential regulatory hurdles involved.

Origin responded yesterday morning with an updated financing commitment from SummitView for $1.85 billion, assurances of its confidence in its ability to resolve any regulatory issues, and a reiteration of its intention to complete the deal quickly and with minimal due diligence.

Late yesterday Origin then increased its acquisition offer to $17 per share and added a reverse termination fee of $100 million. The new proposal also includes a "hell or high water" provision obligating Origin to take any and all actions required to obtain regulatory approvals for the merger.

According to Origin, the increased offer represents a nearly 85 percent premium to Affymetrix’s closing share price of $9.21 on the last trading day prior to the announcement of Thermo Fisher's bid. It also offers Affy stockholders a roughly 21 percent premium relative to Affy's proposed transaction with Thermo Fisher, Origin said.

With its new proposal, Orign asked Affy to postpone its March 24 special shareholders meeting, and having deemed the proposal potentially superior, Affy agreed to postpone the meeting to March 31.

In a statement, Affy said that based on the terms of the new offer, it determined that failure to engage with Origin on its bid could reasonably be expected to be "inconsistent with the board’s duties under Delaware law."

However, Affy said that its board continues to recommend that its stockholders vote in favor of the adoption of the merger agreement with Thermo Fisher, explaining that it "has not determined that the Origin proposal is in fact a 'superior proposal' for purposes of the merger agreement with Thermo Fisher and is not making an adverse recommendation change.

"We fully expect that the Affymetrix board of directors will promptly conclude that our transaction remains the only bona fide alternative for Affymetrix stockholders and, as contemplated by the terms of our merger agreement, will definitively recommend against the Origin Technologies proposal and in favor of the Thermo Fisher transaction prior to the upcoming stockholder meeting," Thermo Fisher President and CEO Marc Casper said in a statement this morning.

"Origin Technologies has still not addressed the fundamental flaws of its proposal, which has remained from its first announcement highly contingent, uncertain, and insufficient," he added.

In Wednesday morning trade on the Nasdaq, shares of Affy were up 4 percent at $14.96, while shares of Thermo Fisher were up a fraction of 1 percent at $139.53 on the New York Stock Exchange.

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