Get Started for Free Contexxia identifies hard-to-find pieces of information in SEC filings. No more highlighters, no more redlining, no more poring over huge documents. AFFYMETRIX INC (913077) 10-K published on Feb 17, 2016 at 8:47 pm
Reporting Period: Dec 30, 2015
On January 8, 2016, the Company entered into an Agreement and Plan of Merger (the "Merger Agreement") with Thermo Fisher and White Birch Merger Co, a Delaware corporation and a wholly owned subsidiary of Thermo Fisher ("Merger Sub"), providing for, subject to the satisfaction or waiver of specified conditions, the acquisition of the Company by Thermo Fisher at a price of $14.00 per share in cash. Subject to the terms and conditions of the Merger Agreement, the closing of the merger is expected to occur during the second quarter of 2016.
The announcement and pendency of the proposed acquisition of our Company by Thermo Fisher could cause disruptions in and create uncertainty surrounding our business, including affecting our relationships with our existing and future customers, suppliers and employees, which could have an adverse effect on our business, financial results and operations, regardless of whether the proposed merger is completed. In particular, we could potentially lose important personnel as a result of the departure of employees who decide to pursue other opportunities in light of the proposed acquisition. We could also potentially lose customers or suppliers, and new customer or supplier contracts could be delayed or decreased. In addition, we have diverted, and will continue to divert, significant management resources towards the completion of the transaction, which could adversely affect our business and results of operations.
We are also subject to restrictions on the conduct of our business prior to the consummation of the merger as provided in the Merger Agreement, including, among other things, certain restrictions on our ability to acquire other businesses, sell, transfer or license our assets, amend our organizational documents, and incur indebtedness. These restrictions could result in our inability to respond effectively to competitive pressures, industry developments and future opportunities and may otherwise harm our business, financial results and operations.
There is no assurance that the closing of the merger will occur. Consummation of the merger is subject to various conditions, including, among other things, the approval of the Merger Agreement and the merger by the holders of a majority of our outstanding shares of common stock, and certain other customary conditions, including, among other things, the absence of laws or judgments prohibiting or restraining the merger and the receipt of certain regulatory approvals. We cannot predict with certainty whether and when any of these conditions will be satisfied. In addition, the Merger Agreement may be terminated under certain specified circumstances, including, but not limited to, a change in the recommendation of the board of directors of the Company or a termination of the Merger Agreement by the Company to enter into an agreement for a “superior proposal”. If the merger is not consummated, our stock price will likely decline as our stock has recently traded at prices based on the proposed per share price for the merger. We will have incurred significant costs, including, among other things, the diversion of management resources, for which we will have received little or no benefit if the closing of the merger does not occur. A failed transaction may result in negative publicity and a negative impression of us in the investment community. The occurrence of any of these events individually or in combination could have a material adverse effect on our results of operations and our stock price.
Between January 19, 2016 and January 27, 2016, four substantially similar putative shareholder class action suits were filed by individual stockholders in the Superior Court of California in Santa Clara County against the Company's directors. The complaints also name Thermo Fisher and Merger Sub as defendants. The cases are captioned Steven Merola v. Affymetrix, Inc., et al., Case No. 16CV290267, Betty Greenberg v. Frank Witney, et al., Case No. 16CV290339, Jeffrey S.L. Cheah v. Affymetrix, Inc., et al., Case No. 16CV290794, and Robert Cox v. Affymetrix, Inc., et al., Case No. 16CV290866. (The Merola, Cheah, and Cox cases also name the Company itself as a defendant.) The complaints allege that the Company's directors breached their fiduciary duties by failing to maximize stockholder value in negotiating and approving the Merger Agreement. The complaints also generally allege that the additional defendants named in each suit aided and abetted these alleged breaches of fiduciary duties. The complaints seek, among other forms of relief, class certification and injunctive relief blocking consummation of the merger.
The Company and the other defendants have not yet responded to the complaints. The Company believes these actions are without merit.