A Life Technologies Corp. shareholder sued to block the $13.6 billion acquisition of the biotechnology equipment maker by Thermo Fisher Scientific Inc., saying the offer is unfair to investors.
The deal proposes significant benefits for Thermo Fisher at the expense of shareholders of Carlsbad, California-based Life Technologies and doesn’t adequately reflect the company’s true value, the trustee for the Herman Smilow 2011 Irrevocable Trust said in a complaint filed in Delaware Chancery Court and made public today.
“The proposed transaction lacks any of the fundamental hallmarks of fairness,” according to the complaint. “The company has been improperly undervalued and the sales process unlawfully and unfairly favors Thermo Fisher.”
The $76-a-share offer also includes the assumption of $2.2 billion in debt, Waltham, Massachusetts-based Thermo Fisher said in a statement April 15. With the debt, the deal is valued at about $15.8 billion. The per-share offer is 12 percent more than Life Technologies’ closing price (LIFE:US) of $68 on April 12.
Thermo Fisher edged out smaller rival Sigma-Aldrich Corp. in its pursuit of Life Technologies, which makes laboratory equipment that helps map DNA. The deal expands Thermo Fisher’s reach in medical testing.
Gene mapping is used to diagnose disease, identify risks of certain conditions and better target medicines. The market for gene tests may expand to $25 billion from $5 billion within a decade, according to a report last year from UnitedHealth Group Inc.
The transaction expands Thermo Fisher’s product offerings (TMO:US), improving its competitive position in the life sciences market, according to the complaint. It’s also expected to increase Thermo Fisher’s annual revenue by about 30 percent and its earnings (TMO:US) by about 36 percent, while generating $275 million in savings in manufacturing and distribution costs, according to the complaint.
The plaintiff seeks to represent all Life Technologies shareholders in its request for a court order barring the transaction.
The case is Smilow, Trustee for the Herman Smilow 2011 Irrevocable Trust v. Life Technologies Corp. (LIFE:US), CA8504, Delaware Chancery Court (Wilmington).
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