Madryn Asset Management Highlights Increasing Public Shareholder Opposition to Value-Destructive SomaLogic Merger and Calls on Company to Make Additional Disclosures
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The opposition to the merger between SomaLogic and Standard BioTools highlights several critical financial considerations. The dissenting shareholders, including Madryn Asset Management, argue that the merger undervalues SomaLogic. This claim warrants a closer look at the valuation metrics used in the deal, such as the price-to-earnings ratio, revenue multiples and other financial health indicators. If the merger does indeed undervalue SomaLogic, shareholders could potentially miss out on future gains. Moreover, the fact that significant shareholders are voting against the merger suggests there might be alternative strategies that could unlock greater value for the company. These could include pursuing independent growth plans, seeking other merger or acquisition opportunities, or restructuring operations to enhance profitability.
Additionally, the mention of SomaLogic's cash per share versus Standard BioTools' share value implies a near parity in financial terms, which may not justify the merger from a purely financial perspective. Investors should carefully scrutinize the terms of the deal and consider the long-term implications of such a transaction. The merger's impact on the stock market could be substantial, influencing not only the share prices of the companies involved but also the broader biotechnology sector. Market sentiment, as reflected by shareholder opposition, could lead to increased volatility in the stock prices of both entities.
The lawsuit filed by the former CEO of SomaLogic against the company is a significant legal development that could have implications for the merger process. Legal disputes can introduce uncertainty and delay transactions, which in turn can affect shareholder value. The nature and substance of the lawsuit could also reveal potential governance issues or conflicts of interest that may need to be addressed before moving forward with any merger. Shareholders require comprehensive disclosures to make informed decisions and any lack of transparency or alleged process shortcomings could raise legal concerns. These issues must be thoroughly investigated to ensure that the merger complies with regulatory standards and serves the best interests of all stakeholders.
Public shareholder opposition is a significant indicator of market sentiment and in this case, it suggests a lack of confidence in the proposed merger's ability to create shareholder value. The collective disapproval from several major shareholders and the former CEO might influence other investors and could lead to broader market skepticism. The market's reaction to such dissent is often negative, potentially affecting the stock performance of both companies involved. Furthermore, the need for additional disclosures as highlighted by the opposing shareholders points to a possible information asymmetry that could be affecting market efficiency. The market relies on full and fair disclosure to function properly and any perception that critical information is being withheld could lead to a reassessment of the companies' market valuations.
Highlights That Four SomaLogic Shareholders Have Now Openly Stated Their Intention to Vote “AGAINST” the Proposed Merger with Standard BioTools
Urges Fellow Shareholders to Vote “AGAINST” the Proposed Merger and Allow SomaLogic to Pursue Value-Enhancing Alternatives
We would like to thank the many shareholders and stakeholders who have engaged in a productive dialogue with us and those who have already made their opposition to the Proposed Merger known, either publicly or privately. As we quickly approach the January 4th Special Meeting of Shareholders, we want to reiterate our strong opposition to the Transaction because it (i.) dramatically undervalues the Company, (ii.) results from what was clearly a sham process and (iii.) robs SomaLogic shareholders of the potential value that could stem from a range of other alternatives. We ask that investors carefully consider the analysis and facts published by Madryn, rather than relying on proxy advisory firms that inexplicably recommend shareholders trade a company with
We urge all parties to take note of the following points:
Public Shareholder Opposition to the Proposed Merger is Significant
SomaLogic founder Lawrence Gold’s letter yesterday indicating he is against the Proposed Merger is just the latest in a string of public statements from shareholders registering their discontent. In addition to Madryn, Skye Fund III and Tikvah Management have also made their opposition known – making for a total of four separate significant shareholders voting against the Transaction – as well as the former CEO, Roy Smythe, suing the Company.
As a reminder, the recommendation from proxy advisory service Institutional Shareholder Services, Inc. (“ISS”) only offered “cautionary support” for the Proposed Merger, which clearly leaves the door open for shareholders with reservations to vote “AGAINST” the Transaction.
The Company Must Make Additional Disclosures So Shareholders Can Make Fully Informed Decisions
SomaLogic continues to dodge critical questions and instead simply repeats the same tired and weak points in support of the Proposed Merger. Information has come to light that indicates the Company has failed to make important and robust disclosures about the merger process, in particular, to address these key questions:
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Did the Board of Directors (the “Board”) conduct a formal search for a permanent CEO?
- SomaLogic still has not addressed this question despite seemingly making selective disclosures to ISS.
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How does the Board justify not including strategics such as Laboratory Corporation of America Holdings (“Labcorp”) (NYSE: LH) – in what it implies was a thorough and independent process?
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As we recently disclosed, the Transaction Committee of the Company’s Board did not pursue a substantive dialogue with Labcorp, one of the industry’s most logical strategics, with a
$19 billion
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As we recently disclosed, the Transaction Committee of the Company’s Board did not pursue a substantive dialogue with Labcorp, one of the industry’s most logical strategics, with a
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Did the Board evaluate other companies associated with Eli Casdin as part of its process, and was that evaluation the result of pressure from Mr. Casdin?
- In addition to the numerous conflicts of interest inherent in the merger process that benefit Mr. Casdin, we have reason to believe that he may have pressured the Board to consider additional sub-par potential merger/acquisition partners in which he also has an interest.
The Merger Consideration Does Not Offer a Reasonable Premium to the Company’s Cash
SomaLogic has valuable assets, including intellectual property, relationships and revenues. Despite this, the value of the merger consideration is currently approximately
Better Value-Creating Alternatives Exist for SomaLogic
As we have comprehensively articulated, SomaLogic has exciting opportunities to create value by terminating the Proposed Merger and pursuing alternative paths. The Company should immediately activate the following simple five-point plan:
- Resolve Litigation and Shareholder Disputes
- Refresh the Board in a Methodical Way
- Install a Commercially Focused Management Team
- Implement Operational Enhancements
- Consider Strategic Alternatives on an Appropriate Timeline
Shareholders should not accept what is clearly a flawed and value-destructive deal. We look forward to continuing to communicate further in the days ahead.
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Madryn Urges SomaLogic Shareholders to Vote “AGAINST” the Proposed Merger
Voting “AGAINST” the Proposed Merger Will Protect the Value of Your Investment and Will Position SomaLogic to Pursue Vastly Superior Alternatives
Visit www.NoSomaLogicMerger.com for Additional Information
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About Madryn Asset Management
Madryn Asset Management is a leading alternative asset management firm that invests in innovative healthcare companies specializing in unique and transformative products, technologies and services. The firm draws on its extensive and diverse experience spanning the investment management and healthcare industries and employs an independent research process based on original insights to target attractive economic opportunities that deliver strong risk-adjusted and absolute returns for its limited partners while creating long-term value in support of its portfolio companies.
IMPORTANT ADDITIONAL INFORMATION
Madryn Asset Management, LP, Madryn Health Partners, LP, Madryn Health Partners (Cayman Master), LP, Madryn Health Advisors, LP, Madryn Health Advisors GP, LLC, Madryn Select Opportunities, LP, Madryn Select Advisors, LP, Madryn Select Advisors GP, LLC and Avinash Amin (collectively, the “Participants”) are participants in the solicitation of proxies from the stockholders of SomaLogic in connection with the special meeting of stockholders (the “Special Meeting”). On December 18, 2023, the Participants filed with the
Disclaimer
This material does not constitute an offer to sell or a solicitation of an offer to buy any of the securities described herein in any state to any person. In addition, the discussions and opinions in this press release are for general information only, and are not intended to provide investment advice. All statements contained in this release that are not clearly historical in nature or that necessarily depend on future events are “forward-looking statements,” which are not guarantees of future performance or results, and the words “anticipate,” “believe,” “expect,” “potential,” “could,” “opportunity,” “estimate,” and similar expressions are generally intended to identify forward-looking statements. The projected results and statements contained in this press release that are not historical facts are based on current expectations, speak only as of the date of this press release and involve risks that may cause the actual results to be materially different. Certain information included in this material is based on data obtained from sources considered to be reliable. No representation is made with respect to the accuracy or completeness of such data, and any analyses provided to assist the recipient of this presentation in evaluating the matters described herein may be based on subjective assessments and assumptions and may use one among alternative methodologies that produce different results. Accordingly, any analyses should also not be viewed as factual and also should not be relied upon as an accurate prediction of future results. All figures are unaudited estimates and subject to revision without notice. Madryn disclaims any obligation to update the information herein and reserves the right to change any of its opinions expressed herein at any time as it deems appropriate. Past performance is not indicative of future results.
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Saratoga Proxy Consulting
John Ferguson / Joseph Mills, 212-257-1311
info@saratogaproxy.com
Source: Madryn Asset Management, LP
