According to a law firm's press release, on July 27, 2016, the Company and LabCorp issued a joint press release announcing that they entered into a definitive agreement and plan of merger (the “Merger Agreement”) under which LabCorp would acquire all of the outstanding shares of Sequenom in a cash tender offer for $2.40 per share (the “Tender Offer), representing a total enterprise value of approximately $371 million, including net indebtedness. The press release further states that the Board approved the Merger Agreement and the terms of the Tender Offer, and recommends that the Company’s stockholders tender their shares. The Tender Offer commenced on August 9, 2016, and is scheduled to expire at 12:01 a.m. Eastern time on September 7, 2016 (the “Expiration Date”), unless the Tender Offer is extended.
The Complaint alleges that the Proposed Transaction is the result of an unfair process and provides the Company’s stockholders with inadequate consideration. The Complaint alleges that inadequacy of the $2.40 per share Tender Offer price is evidenced by the fact that just over a year before the Proposed Transaction was announced, Sequenom shares traded in the $4.00 per share range. The Complaint also alleges that Sequenom has introduced new products, expanded its market reach and executed a corporate restructuring strategy that resulted in a substantial financial turnaround. However, the Complaint alleges that the Board, knowing that the inadequate price and opportunistic timing of the Proposed Transaction would draw serious interest from other potential buyers, and in an effort to ensure that the Proposed Transaction is consummated, agreed to include certain provisions in the Merger Agreement that unreasonably inhibit potential third party bidders from launching topping bids, including: (i) a strict no-solicitation provision that severely constrains the Individual Defendants’ ability to communicate with potential buyers who wish to submit or have submitted unsolicited alternative proposals; (ii) an information rights provision that provides LabCorp with unrestricted access to information about other potential bids, gives LabCorp five business days to match any competing offer that may be made, and gives LabCorp the perpetual right to attempt to match any competing bid; and (iii) a termination fee provision requiring the Company to pay $10.6 million (or nearly 3% of the total value of the Proposed Transaction, based on the $371 million enterprise value of the transaction) to LabCorp in the event that the Company receives a higher offer and enters into an alternative transaction.