Another investor opposes Somalogic merger

Advisory firm urges shareholders approval

BOULDER — Investment firm Tikvah Management LLC plans to oppose SomaLogic Inc.’s (Nasdaq: SLGC) planned $1 billion merger with California-based Standard BioTools Inc. (Nasdaq: LAB), making Tikvah the second major investor to stake out a position against the deal in the last week or so. 

Meanwhile, SomaLogic, is touting support of the merger from Institutional Shareholder Services Inc., a proxy advisory firm that provides guidance for institutional investors such as mutual or pension funds.

Tikvah, which claims that it holds voting rights for 5.9 million SomaLogic shares, or 3.1% of the company’s outstanding shares, said that it “believes the proposed merger is not in the best interest of Somalogic shareholders, echoing reasons elaborated by other investors opposing the merger, including the undervaluation of Somalogic shares, an inadequate merger process and poor quality of Standard BioTools’ business and balance sheet.”

Tikvah’s statement of opposition comes on the heels Madryn Asset Management, a New York investment firm that claims to own 4.2% of SomaLogic’s outstanding shares, telling shareholders this month that it believes the merger to be an “inherently flawed and one-sided combination with Standard,” that “drastically undervalues SomaLogic.”

According to Somalogic, Institutional Shareholder Services has told its clients that the “strategic rationale of combining two sub-scale companies (SomaLogic and Standard) in order to slow down cash burn and accelerate the path to profitability appears reasonable, particularly given the apparent overlap in the two companies’ offerings and the estimated synergies in this transaction.”

The merger plan, which was unanimously approved by the boards of directors of both companies, establishes a deal that will see SomaLogic shareholders receive 1.11 shares of Standard BioTools common stock for each share of SomaLogic common stock owned. When the merger is complete, SomaLogic shareholders will own approximately 57% of the combined company, and Standard BioTools shareholders will own the remainder.

SomaLogic said in a news release that it “is pleased that ISS shares its belief that the merger with Standard BioTools is in the best interests of all SomaLogic stockholders and supports the board’s recommendation that stockholders vote for the transaction. The transaction with Standard BioTools delivers compelling long-term stockholder value…”

SomaLogic develops platforms to read thousands of proteins in a patient’s blood or urine sample that may signal illnesses or future health conditions and suggest potential treatments via machine learning.

SomaLogic went public in early 2021 through a merger with a special purpose acquisition company that added about $651 million in new funding to the company’s books and valued it at $1.23 billion. 

The road toward the merger with Standard BioTools has been a rocky one, as SomaLogic has struggled to attain profitability. The company’s stock price has shaved off more than 80% of value since the SPAC deal.

SomaLogic, in a letter sent to shareholders last week, said the deal with Standard is “a merger that we believe is in the best interests of all SomaLogic stockholders.”

The merger is expected to allow the combined company to reduce $80 million in cost redundancies. 

SomaLogic and Standard shareholders are expected to vote to consummate the merger on Jan. 4.

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