Qiagen Investors Shun Thermo Fisher's $12.5B Offer

By McCord Pagan
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Law360 (August 13, 2020, 4:20 PM EDT) -- Thermo Fisher Scientific's $12.5 billion attempted takeover of European genetic testing company Qiagen fell apart Thursday, after the sweetened proposal failed to win over a majority of Qiagen's shareholders.

Just over 47% of Netherlands-based Qiagen NV stockholders had agreed to turn over their shares to Massachusetts-headquartered Thermo Fisher Scientific Inc. by a Monday deadline, falling short of the 66.67% threshold, according to releases from the companies. The microscope supplier opted to terminate the deal based on those results.

Some Qiagen investors were skeptical toward the deal, saying it undervalued the business, especially in light of the company's recent success in offering testing products for the novel coronavirus. That skepticism remained even after Thermo Fisher last month upped its offer from €39 to €43 per share (about $46 to $51), raising its valuation for the business by $1 billion.

"We respect the decision of our shareholders and will now continue to execute our strategy to deliver growth and create greater value with our Sample to Insight portfolio that addresses growing molecular testing needs in the life sciences and molecular diagnostics," Dr. Håkan Björklund, chairman of the supervisory board of Qiagen, said in a statement.

Qiagen is a genetic testing company whose shares trade on the Frankfurt Prime Standard exchange, and Thermo Fisher is a major supplier of microscopes and other laboratory equipment.

The transaction, which had been rumored since November, would have seen Thermo Fisher picking up a company that boasted over 35 locations across more than 25 countries and had revenue of $1.53 billion last year, according to a statement when the transaction was announced March 3.

As a result of the canceled deal, Qiagen will pay Thermo Fisher a $95 million break up fee, the American company said.

"Thermo Fisher is a disciplined acquirer with a strong track record of executing value-creating transactions," Marc Casper, chairman, president and CEO of Thermo Fisher, said in a statement.

"We remain extremely well-positioned to deliver on our proven growth strategy and continue to generate significant returns for our shareholders," he said.

Hedge fund and Qiagen shareholder Davidson Kempner Capital Management LP had earlier rejected the increased offer as still below its target price range of roughly $56.70 to $61.40 per share and encouraged other investors to do the same.

In a statement Thursday, the asset manager and second largest investor in Qiagen said it was pleased a majority of shareholders declined to tender their shares and said the 47% acceptance level was an indication of widespread confidence in the company's long-term prospects.

However, the firm said it wanted to improve the engagement between Qiagen and its shareholders, refocus the company's strategy to be a high-growth business with a disciplined capital allocation framework and capitalize on opportunities such as the effects of the COVID-19 pandemic.

On Thursday, Qiagen also said it plans to spend about $234 million to buy out the 80.1% stake in NeuMoDx Molecular Inc. that it doesn't already own.

Qiagen said it expects to receive significant sales from the Ann Arbor, Michigan, company as a result of its platform for not only COVID-19 tests, but also for diseases such as influenza and RSV, respiratory syncytial virus.

In a statement Aug. 4 announcing financial results, Qiagen said "unprecedented demand" for its COVID-19 testing products is driving its performance.

Qiagen said it took in more than $443 million in net sales in the second quarter of 2020 and about $815 million for the first half of the year, increases of 16% and 12% from the same periods last year, respectively.

Spokespersons for Thermo Fisher and NeuMoDx did not immediately respond to requests for further comment. Representatives for Davidson Kempner and Qiagen declined to comment beyond their public statements.

Counsel information for the NeuMoDx deal was not available.

Thermo Fisher was represented by Wachtell Lipton Rosen & Katz, and J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC were its financial advisers.

Qiagen was represented by De Brauw Blackstone Westbroek NV, Linklaters LLP and Mintz Levin Cohn Ferris Glovsky and Popeo PC.

The Mintz Levin team was led by members Jonathan Kravetz, Michael Fantozzi, and Matthew Gardella.

Goldman Sachs International was lead financial adviser to Qiagen, and Barclays Bank PLC was financial adviser.

Sullivan & Cromwell LLP represented Goldman Sachs and Barclays in their role as financial advisers to Qiagen. The Sullivan & Cromwell team included corporate partner Stephen M. Kotran and associates Patrick V. Salvo, Lee C. Parnes and Paul D. Lowry.

--Additional reporting by Benjamin Horney and Elise Hansen. Editing by Alyssa Miller.

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