Thermo Fisher Ups QIAGEN Bid by $1 Billion
Thermo Fisher Scientific sweetened its bid offer for QIAGEN with an extra $1 billion to gain the European company’s diagnostic capabilities for cancer and COVID-19. The increase reflects the positive financial impact COVID-19 has had on the European diagnostic company’s bottom line.
On Thursday, Thermo Fisher said it upped the tender offer initially reported as €39 per share to €43 per share, a 35% increase over the QIAGEN share price that closed on March 2, the last trading day before Thermo Fisher publicly announced its intentions to buy the company. The boosted bid reflects positive financial growth QIAGEN posted in its most recent financial disclosure. Following Thermo Fisher’s announcement Thursday, QIAGEN share prices jumped about 3% to close at $47.68, which converts to €41.73 per share.
The agreement has supported by been unanimously QIAGEN's Supervisory Board and Managing Board. Those boards have recommended that QIAGEN shareholders accept the deal. However, one of QIAGEN’s largest shareholders, Davidson Kempner Capital Management, has urged shareholders to reject the deal. In an open letter, Davidson Kemper called the amended offer “wholly inadequate” and said it will not accept the offer.
In its open letter, Davidson Kemper pointed to the diagnostic tools that QIAGEN has developed for COVID-19 as its primary reason to reject the current bid. Davidson Kemper said “COVID-19 has a material long-term impact on the diagnostics industry, and that these trends are going to be a significant driver for the company's prospects and fundamental value over the short and long term.” As the bulk of world economies continue to emerge from lockdown, Davidson Kemper said diagnostics against the pandemic will continue to be in high demand, thus making the company more valuable. Davidson Kemper pegged the value of QIAGEN at €50 per share.
In its announcement Thursday regarding the increase in offer, Marc N. Casper, president and chief executive officer of Thermo Fisher, acknowledged how COVID-19 has changed the landscape since the original deal was announced in March.
“Industry dynamics have changed considerably in the past few months, creating tailwinds and headwinds for our businesses. 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,” Casper said in a statement.
Casper added he is confident the amended transaction will created shareholder value and also benefit society by “combining our capabilities to combat infectious diseases and other healthcare issues.” Casper said he anticipates the deal being finalized in the first half of 2021.
Thierry Bernard, CEO of QIAGEN N.V., reiterated that the company’s boards recommend shareholders accept the offer. Bernard said the increased tender offer “reflects the improvements in our business performance and future prospects as a result of the coronavirus pandemic."
"The rationale for this strategic step is stronger than ever, especially as the value of molecular testing becomes ever more evident. This combination is designed to enable QIAGEN employees and our portfolio of Sample to Insight solutions to have an even greater impact on society while also delivering significant cash value to our shareholders,” Bernard said in a statement.
In addition to the extra $1 billion offering, the amended agreement reduced the minimum acceptance threshold from 75% to 66.67% of QIAGEN's issued and outstanding ordinary share capital at the end of the acceptance period on Aug. 10. Also, the amendment provides a $95 million reimbursement to Thermo Fisher if the minimum acceptance threshold is not met.