Thermo Fisher’s €10.7bn bid to buy Qiagen has collapsed after the Dutch diagnostics group’s investors said the offer was too low given a surge in demand for the coronavirus testing equipment that Qiagen makes. 

Massachusetts-based Thermo Fisher said on Thursday that only 47 per cent of investors in Qiagen had tendered their shares, falling short of the 66.6 per cent threshold needed to clinch to the deal. 

The collapse marks a rare example of a major deal unravelling because the fortunes of the companies involved have been strengthened by the pandemic, rather than hit by it.

Qiagen’s sales have surged due to what it called “unprecedented demand” for its coronavirus-related products, which has offset weakness in other parts of its business. 

The Dutch group makes molecular testing equipment and has developed Covid-19 test kits for research purposes. During the pandemic it has increased production and moved to 24-hour, seven-day-a-week operations at two manufacturing sites.

The deal’s collapse raises questions over whether Qiagen’s board can continue to stay in place, given its backing of the transaction. 

The Dutch group will need to pay $95m to Thermo Fisher under the terms of a revised deal reached last month, which demanded the fee if Qiagen investors failed to support the transaction. 

“Thermo Fisher is a disciplined acquirer with a strong record of executing value-creating transactions,” said Marc Casper, the company’s chairman and chief executive. “We remain extremely well-positioned to deliver on our proven growth strategy and continue to generate significant returns for our shareholders.”

Qiagen did not immediately respond to a request to comment.

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The deal’s rejection comes despite Thermo Fisher last month sweetening its offer by almost €1bn after investors argued its original €39 per share bid in March did not reflect how much the company would benefit from the pandemic. 

Its revised offer of €43 per share came under immediate attack from the US hedge fund Davidson Kempner which has been building up its stake and now owns 8 per cent of Qiagen’s shares.

The hedge fund said it would not tender its shares, instead seeking an offer of €48-€52 per share, and launched a rare public campaign to convince other investors to hold out. 

The deal was also opposed by the Swiss hedge fund PSquared, which owns more than 4 per cent and last month said it would not tender its shares even after the deal was sweetened because it “materially undervalues” Qiagen. 

Shares in Qiagen, which has previously produced testing equipment used during the Sars and swine flu outbreaks, fell 1 per cent to €40.91 on Thursday, giving its equity a value of €9.33bn.

The company’s shares have risen 29 per cent since the Thermo Fisher bid was announced in March.

Via Financial Times