Hyseq And VARIAGENICS Announce Merger
Monday November 11, 6:53 am ET
SUNNYVALE, Calif. -(Dow Jones)- Hyseq Pharmaceuticals Inc. and Variagenics Inc. (NasdaqNM:VGNX - News) signed a definitive merger agreement. The boards of both companies have approved the deal.
Under the terms of the transaction, each outstanding share of Variagenics will be exchanged for Hyseq common stock at an exchange ratio of 1:1.6451. The deal is worth about $2.22 a share of Variagenics, or about $55.9 million, including options and warrants, based on Hyseq's closing price of $1.35 a share on Friday.
In a press release Monday, the companies said they "will take steps to help ensure that cash resulting from the merger will fund its operations through approximately December 2004. As a result the new company will have approximately 110-120 employees following the close of the transaction." The number of workers at each company presently wasn't immediately known.
The merger, which requires shareholder approval, will be a reverse triangular, stock-for-stock merger in which Hyseq will form a new unit that will merge into Variagenics. The surviving entity will then be merged into Hyseq.
Hyseq will change its legal name and stock symbol and its existing unit, Callida Genomics, will remain a privately held, separately funded, majority owned unit of the new company.
The deal is structured as a "tax-free" reorganization for federal income tax purposes and is subject to closing conditions.
Both parties plan to complete the merger by the end of February.
In connection with the proposed merger, Hyseq and Variagenics will file a joint proxy statement and prospectus with the Securities and Exchange Commission.
The new company will develop biotherapeutic and molecular diagnostic products. A conference call is planned for 8:30 a.m. EST Monday to comment on the merger.
Company Web sites: hyseq.com - www.Variagenics.com
-Jacquie Jordan; Dow Jones Newswires; 201-938-5400 |
