Affymetrix Sued Over Acquisition Funding
When Affymetrix announced the acquisition, it stated that, to fund it, it had obtained an underwritten senior secured financing commitment of $190 million and that it would be required to retain $95 million in cash to cover its outstanding convertible debt. On December 28, Affymetrix announced in an SEC filing that the acquisition of eBioscience had been delayed from December to January 2012 in order to complete the debt financing.
Washington, DC 12/30/11; New York, NY 12/30/11—Affymetrix disclosed in a regulatory filing that Tang Capital Partners has filed a class action suit in Santa Clara Superior Court against the company in connection with its acquisition of eBioscience (see IBO 11/30/11). Tang Capital Partners is a holder of the company’s 3.50% Senior Convertible Notes Due 2038. Among the complaint’s allegations, according to Affymetrix, are that “the acquisition would constitute a Fundamental Change under the indenture governing the Notes.” Affymetrix stated that the complaint is without merit and that it is working to close the acquisition in January 2012. Bloomberg reported that Tang Capital alleges that $95 million in cash that Affymetrix is using as collateral for the acquisition is designated instead to purchase Tang Capital and other investors’ Notes, in accordance with a provision of the Notes. Tang Capital purchased $78 million in Affymetrix Notes between 2008 and 2011, according to Bloomberg. Tang Capital Partners issued no statement.
