23andMe Special Committee responds to CEO’s take-private proposal
The Special Committee of 23andMe's Board of Directors has rejected CEO Anne Wojcicki's proposal to take the company private at $0.40 per share. The committee deemed the offer insufficient and not in the best interest of non-affiliated shareholders, citing lack of premium, committed financing, and its conditional nature. They requested Wojcicki to withdraw her intent to oppose alternative transactions and provided a two-week window for a revised, fully-financed proposal. The committee plans to engage a consultant to advise on a revised business plan for a more sustainable financial profile and path to profitability. Wells Fargo is serving as financial advisor, and Dechert LLP as legal advisor to the Special Committee.
Il Comitato Speciale del Consiglio di Amministrazione di 23andMe ha rigettato la proposta del CEO Anne Wojcicki di privare l'azienda a $0,40 per azione. Il comitato ha ritenuto l'offerta insufficiente e non nel miglior interesse degli azionisti non affiliati, citando la mancanza di un premio, finanziamenti garantiti e la sua natura condizionata. Hanno chiesto a Wojcicki di ritirare l'intento di opporsi a transazioni alternative e hanno fornito un termine di due settimane per una proposta rivista e completamente finanziata. Il comitato prevede di ingaggiare un consulente per consigliare su un piano aziendale rivisitato per un profilo finanziario più sostenibile e un percorso verso la redditività. Wells Fargo funge da consulente finanziario e Dechert LLP come consulente legale per il Comitato Speciale.
El Comité Especial de la Junta Directiva de 23andMe ha rechazado la propuesta de la CEO Anne Wojcicki de privatizar la empresa a $0.40 por acción. El comité consideró que la oferta era insuficiente y no en el mejor interés de los accionistas no afiliados, citando la falta de un premio, financiamiento comprometido y su naturaleza condicional. Solicitaron a Wojcicki que retirara su intención de oponerse a transacciones alternativas y proporcionaron un plazo de dos semanas para una propuesta revisada y completamente financiada. El comité planea contratar a un consultor para asesorar sobre un plan de negocios revisado que permita un perfil financiero más sostenible y un camino hacia la rentabilidad. Wells Fargo actúa como asesor financiero y Dechert LLP como asesor legal para el Comité Especial.
23andMe의 이사회 특별위원회는 CEO 앤 우야시키의 제안을 거부했습니다, 회사 를 주당 $0.40에 비상장화하자는 제안이었습니다. 위원회는 이 제안이 불충분하고 비연관 주주들의 최선의 이익에 부합하지 않는다고 판단했습니다. 프리미엄 부족, 확정 자금 및 조건부 성격을 지적하였습니다. 그들은 우야시키에게 대안 거래에 반대하는 의도를 철회할 것을 요청했습니다 그리고 수정된 완전 자금 조달 제안에 대한 2주간의 기한을 제공했습니다. 위원회는 재정적으로 지속 가능한 투자의 경로를 위한 수정된 사업 계획에 대해 조언할 컨설턴트를 고용할 계획입니다. 웰스파고는 재정 자문 역할을 하고, Dechert LLP는 특별위원회의 법률 자문 역할을 하고 있습니다.
Le Comité Spécial du Conseil d'Administration de 23andMe a rejeté la proposition de la CEO Anne Wojcicki de privatiser l'entreprise à 0,40 $ par action. Le comité a jugé l'offre insuffisante et non dans le meilleur intérêt des actionnaires non affiliés, citant l'absence de prime, de financement engagé et la nature conditionnelle de l'offre. Ils ont demandé à Wojcicki de retirer son intention de s'opposer aux transactions alternatives et ont fourni une fenêtre de deux semaines pour une proposition révisée et entièrement financée. Le comité prévoit de faire appel à un consultant pour conseiller un plan d'affaires révisé afin d'obtenir un profil financier plus durable et un chemin vers la rentabilité. Wells Fargo agit en tant que conseiller financier et Dechert LLP en tant que conseiller juridique du Comité Spécial.
Der Sonderausschuss des Vorstands von 23andMe hat den Vorschlag von CEO Anne Wojcicki abgelehnt, das Unternehmen für 0,40 $ pro Aktie privat zu machen. Der Ausschuss betrachtete das Angebot als unzureichend und nicht im besten Interesse der nicht verbundenen Aktionäre und verwies auf fehlende Prämien, gesicherte Finanzierung und dessen bedingte Natur. Sie forderten Wojcicki auf, ihr Vorhaben, alternativen Transaktionen entgegenzutreten, zurückzuziehen, und gaben ein zweiwöchiges Zeitfenster für einen überarbeiteten, vollständig finanzierten Vorschlag an. Der Ausschuss plant, einen Berater zu beauftragen, der bei der Überarbeitung des Geschäftsplans berät, um ein nachhaltigeres finanzielles Profil und einen Weg zur Rentabilität zu schaffen. Wells Fargo fungiert als Finanzberater und Dechert LLP als Rechtsberater des Sonderausschusses.
- The Special Committee is actively seeking to maximize shareholder value
- The company is exploring options for a more sustainable financial profile and path to profitability
- CEO's take-private proposal at $0.40 per share offers no premium to the current stock price
- The company's current liquidity position is a concern
- Lack of certainty regarding a path forward with the CEO and potential investors
Insights
As a financial analyst, I find this development in 23andMe's potential privatization quite intriguing. The Special Committee's response to CEO Anne Wojcicki's take-private proposal reveals several critical points:
- The offered price of
$0.40 per share provides no premium to the recent closing price, which is unusual for take-private transactions. - The proposal lacks committed financing, a significant red flag in any acquisition offer.
- The conditional nature of the proposal adds further uncertainty.
The Committee's request for a revised proposal with fully committed financing and a more appropriate price suggests they believe the company is undervalued at the current offer. This stance could potentially lead to a higher bid or open the door for third-party interest.
The mention of the company's current liquidity position and the intent to engage a consultant for a revised business plan is particularly noteworthy. This indicates potential financial struggles and a need for strategic repositioning, which could significantly impact the company's valuation and future prospects.
Overall, this situation presents both risks and opportunities for 23andMe. The outcome will largely depend on whether Wojcicki can secure financing and increase her offer, or if alternative strategic options emerge that could provide better value for shareholders.
From a legal perspective, this situation at 23andMe raises several important considerations. The Special Committee's response demonstrates a clear commitment to their fiduciary duty to act in the best interests of non-affiliated shareholders. Key legal aspects include:
- The emphasis on the need for approval from both the Special Committee and a majority of unaffiliated shareholders is important for ensuring fairness and protecting minority interests.
- The request for Wojcicki to withdraw her intent to oppose alternative transactions is significant. This could be seen as an attempt to remove potential obstacles to maximizing shareholder value and might have antitrust implications if not addressed.
- The Committee's stance on not having unaffiliated shareholders bear the cost of deal expenses aligns with best practices in corporate governance.
The Committee's approach appears designed to create a level playing field for all potential bidders while maintaining their duty to maximize shareholder value. However, the CEO's dual role as a potential acquirer and current executive could create conflicts of interest that will require careful management.
Moving forward, the Special Committee must continue to navigate this process with utmost care to avoid potential shareholder litigation. Their decision to explore alternative options while giving Wojcicki time to revise her proposal demonstrates a balanced approach that should help mitigate legal risks.
This development at 23andMe offers fascinating insights into the current state of the genetics and biopharmaceutical market. Several key factors stand out:
- The proposed
$0.40 per share valuation suggests a significant devaluation of 23andMe's assets and future potential, particularly given the company's pioneering position in consumer genetics. - The Special Committee's push for a revised business plan indicates potential challenges in the current business model, possibly reflecting broader industry trends such as increased competition or regulatory pressures.
- The mention of achieving a more sustainable financial profile and profitability hints at ongoing struggles to monetize the vast genetic database 23andMe has accumulated.
This situation reflects broader market dynamics where many biotech companies are facing valuation pressures due to high R&D costs and long timelines for product development. The potential privatization could allow 23andMe to pursue longer-term strategies without the pressures of quarterly reporting, but it also raises questions about the future of consumer genetics services.
If 23andMe does pursue alternative options, it could potentially spark increased M&A activity in the sector, as larger pharmaceutical or tech companies might see value in acquiring the company's extensive genetic database and research capabilities. This could have ripple effects throughout the industry, potentially leading to further consolidation or strategic partnerships.
SOUTH SAN FRANCISCO, Calif., Aug. 02, 2024 (GLOBE NEWSWIRE) -- The Special Committee of the Board of Directors of 23andMe Holding Co. (Nasdaq: ME), a leading human genetics and biopharmaceutical company, today sent the following letter to Anne Wojcicki, Chief Executive Officer, Co-Founder, and Chair of the Board of Directors of 23andMe, in response to Ms. Wojcicki’s previously disclosed preliminary non-binding indication of interest to acquire all of the outstanding shares of 23andMe not owned by her or her affiliates or any other stockholder that she invites to roll over their shares for cash consideration of
Dear Anne,
We are writing in response to your preliminary, conditional, non-binding proposal dated July 29, 2024.
We are disappointed with the proposal for multiple reasons, including because it provides no premium to the closing price per share on Wednesday, July 31st, it lacks committed financing, and it is conditional in nature. Accordingly, we view your proposal as insufficient and not in the best interest of the non-affiliated shareholders. Therefore, we are not prepared to move forward under the terms provided. Importantly, we request that you immediately withdraw your stated intent to oppose any alternative transaction so that we can fully assess whether there is interest from third parties in a transaction that would maximize value for all shareholders.
Our expectation after months of work was that you would submit a fully-financed, fully-diligenced, actionable proposal that is in the best interests of the non-affiliated shareholders. We understand that your potential sources of financing continue to analyze the opportunity and to do their due diligence. We further understand that these financing sources may be in a position in two weeks to present the opportunity to their respective investment committees. With that in mind, the Special Committee is prepared to provide you and your potential investors with a limited amount of additional time to submit a revised proposal in line with our expectation.
That revised proposal should not be subject to further diligence, and should be accompanied by fully committed financing, including an equity commitment letter(s) on customary terms, that would fully finance the potential transaction. In addition, your revised proposal should not contemplate that the unaffiliated shareholders would bear the cost of your deal expenses. And any revised proposal must continue to be conditioned irrevocably upon the approval of the Special Committee and a majority of the unaffiliated shareholders (as we understand your current proposal is, from your letter and prior communications).
In the absence of a revised offer at a more appropriate price per share that meets the other requirements set forth above, we will pursue other alternatives in striving to maximize value for all shareholders. In that regard, given both the lack of certainty regarding a path forward with you and your potential investors and the current liquidity position of the Company, in parallel with your work to submit a revised bid, we intend to immediately begin the process of engaging a consultant to advise the Special Committee on a revised business plan that would provide the Company with a path to a more sustainable financial profile and achieving profitability. In your capacity as CEO, we expect your full support in these efforts.
Very truly,
Special Committee
There can be no assurance that the foregoing will result in any particular outcome, and 23andMe does not intend to comment further on these matters until 23andMe determines that additional disclosure is appropriate or required by law.
Wells Fargo is serving as financial advisor to the Special Committee, and Dechert LLP is serving as legal advisor to the Special Committee.
About 23andMe
23andMe is a genetics-led consumer healthcare and biopharmaceutical company empowering a healthier future. For more information, please visit www.23andMe.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, included or incorporated in this press release, including statements regarding 23andMe’s strategy, are forward-looking statements. The words "believes," "anticipates," "estimates," "plans," "expects," "intends," "may," "could," "should," "potential," "likely," "projects," “predicts,” "continue," "will," “schedule,” and "would" or, in each case, their negative or other variations or comparable terminology, are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements are predictions based on 23andMe’s current expectations and projections about future events and various assumptions. 23andMe cannot guarantee that it will actually achieve the plans, intentions, or expectations disclosed in its forward-looking statements and you should not place undue reliance on 23andMe’s forward-looking statements. These forward-looking statements involve a number of risks, uncertainties (many of which are beyond the control of 23andMe), or other assumptions that may cause actual results or performance to differ materially from those expressed or implied by these forward-looking statements. The forward-looking statements contained herein are also subject generally to other risks and uncertainties that are described from time to time in the Company’s filings with the Securities and Exchange Commission, including under Item 1A, “Risk Factors” in the Company’s most recent Annual Report on Form 10-K, as filed with the Securities and Exchange Commission, and as revised and updated by our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. The statements made herein are made as of the date of this press release and, except as may be required by law, 23andMe undertakes no obligation to update them, whether as a result of new information, developments, or otherwise.
Contact: press@23andme.com
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