Back in March, Thermo Fisher Scientific announced that it had agreed to acquire Qiagen for $11.5 billion. At the time, the €39 (roughly $46) per share representing a premium of 23 percent over the March 2 closing price of Qiagen’s common stock on March 2, seemed like a fair price. But then came the pandemic and the surge in demand for Qiagen’s products for use in COVID-19 testing, which made €39 per share feel like chump change.

Qiagen Shareholders Demand a New Deal

Qiagen shareholders were quick to notice the disconnect between the tender price and current value of the molecular diagnostics company and accused the Qiagen board of failing to incorporate the impact of COVID-19 into the company’s standalone value. “The Company’s products have become increasingly important to governments and healthcare institutions as they seek to mitigate the risk of future pathogens and protect their citizens and economies,” wrote Davidson Kempner in a letter. The institutional investor, which holds a 3% stake in Qiagen, called Thermo Fisher’s offer price “inadequate,” noting that “the deal has become even more attractive” since it was first announced and predicting that Qiagen 2020 earnings would increase 67%, as opposed to the 3.4% annual organic growth the company has averaged over the past decade.

The New Acquisition Terms 

The firms apparently took notice. On July 13, less than a week after the Davidson Kempner letter was published, Thermo Fisher and Qiagen unveiled an amended agreement “to reflect the fair value of the business given the current environment.” Key terms:

• Offer price increased to €43 ($49) per share, which raises the premium to 35%;
• Minimum acceptance threshold of Qiagen’s issued and outstanding share capital at the end of the acceptance period reduced from 75% to 66.67%; and
• $95 million expense reimbursement to Thermo Fisher if minimum acceptance threshold isn’t met.

Following the announcement, Qiagen’s supervisory and managing boards reaffirmed their unanimous support for and recommendation that shareholders accept the offer and tender their shares by the end of the acceptance period on August 10. Thermo Fisher is reportedly still expecting the deal to close in the first half of 2021.

Here’s a summary of the key M&A diagnostic deals announced in July 2020: