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Law360 (July 16, 2020, 10:16 PM EDT) -- Citing Qiagen's strong performance during the coronavirus pandemic, Thermo Fisher Scientific said in a joint release Thursday that it has increased its takeover bid for the European genetic testing company from about $11.5 billion to roughly $12.5 billion including debt, but the revised deal still faces pushback from a Qiagen investor.
Massachusetts-headquartered Thermo Fisher Scientific Inc. said it will pay €43.00 (about $49) per share in cash for Netherlands-based Qiagen NV, up from the €39 per share price in the original deal. The original transaction valued Qiagen at about $11.5 billion, including roughly $1.4 billion of net debt.
Qiagen is a genetic testing company whose shares trade on the Frankfurt Prime Standard exchange. Thermo Fisher is a major supplier of microscopes and other laboratory equipment.
The change in deal terms was spurred in part by shifting market conditions, according to the companies' announcement.
"Industry dynamics have changed considerably in the past few months, creating tailwinds and headwinds for our businesses," Thermo Fisher Chairman, President and CEO Marc N. Casper said in a statement. "Both of our companies are playing important roles in helping customers to battle the COVID-19 pandemic. After careful consideration, we've decided to increase our offer for Qiagen to reflect the fair value of the business given the current environment."
Qiagen said in a recent preliminary quarterly report that it has seen a jump in demand for its coronavirus testing products. Thermo Fisher said in a July 6 second-quarter outlook that it expects to report about 10% revenue growth stemming from increased demand for products and services that support customers' pandemic response.
The sweetened deal terms did not appear to appease all investors. Hedge fund Davidson Kempner said in a published letter Thursday that while the revised offer was "a step in the right direction," it didn't go as high as the €48 to €52 per share price that it believes Qiagen is worth.
"We will not be tendering our shares into the revised offer," the letter said. "We encourage other shareholders to reject the offer and communicate their views to the Board of the [Qiagen]."
Davidson Kempner Capital Management LP's subadviser, Davidson Kempner European Partners LLP, holds about a 3.6% stake in Qiagen, according to the letter. The investor spoke out against the original deal terms in a letter published last week.
The latest amendments to the tie-up include some provisions safeguarding the deal. The acceptance threshold for the deal was lowered from 75% to 66.6% of Qiagen's outstanding shares, and Qiagen will have to pay its would-be acquirer $95 million if the deal fails to win shareholder approval, the announcement said.
Qiagen's board supported the original offer, and on Thursday reaffirmed its unanimous support for the revised transaction.
"Qiagen's Supervisory Board and Managing Board both unanimously recommend that shareholders accept this offer given that it reflects the improvements in our business performance and future prospects as a result of the coronavirus pandemic," CEO Thierry Bernard said in a statement.
A representative for Thermo Fisher declined to comment, citing a regulatory quiet period. Representatives for Davidson Kempner declined to comment beyond the published letters, and representatives for Qiagen did not immediately respond to requests for comment on Thursday.
Thermo Fisher is represented by Wachtell Lipton Rosen & Katz.
J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC are serving as Thermo Fisher's financial advisers.
Qiagen is represented by De Brauw Blackstone Westbroek NV, Linklaters LLP and Mintz Levin Cohn Ferris Glovsky and Popeo PC.
The Mintz Levin team is led by members Jonathan Kravetz, Michael Fantozzi, and Matthew Gardella.
Goldman Sachs International is serving as lead financial adviser to Qiagen and Barclays Bank PLC is serving as financial adviser.
Sullivan & Cromwell LLP is representing Goldman Sachs and Barclays in their role as financial advisers to Qiagen. The Sullivan & Cromwell team includes corporate partner Stephen M. Kotran and associates Patrick V. Salvo, Lee C. Parnes and Paul D. Lowry.
--Additional reporting by Benjamin Horney. Editing by Alanna Weissman.
Update: this story has been updated to reflect a response from Davidson Kempner.
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