Dr. Larry Gold and Dr. Jason Cleveland Issue Open Letter to SomaLogic Stockholders Opposing SomaLogic's Proposed Merger with Standard BioTools
BOULDER, Colo., Dec. 28, 2023 /PRNewswire/ -- Dr. Larry Gold, the founder of SomaLogic, Inc. ("SomaLogic" or the "Company") (Nasdaq: SLGC) and Dr. Jason Cleveland, SomaLogic's current Chief Technology Officer, are issuing the below letter to SomaLogic's stockholders regarding their opposition to the Company's proposed merger with Standard BioTools, Inc. ("Standard") (Nasdaq: LAB).
Dear Fellow Stockholders:
We are writing as concerned stockholders of SomaLogic, Inc. ("SomaLogic" or the "Company"). Both of us have longstanding relationships with the Company. Larry founded SomaLogic in 2000 and continues to be a significant stockholder. Jason has been involved with the Company since 2016 and has served as Chief Technology Officer since 2021.
Both of us have great faith in SomaLogic's potential. Both of us also have serious concerns about the proposed stock-for-stock combination between the Company and Standard BioTools Inc. ("Standard") that was announced on October 4, 2023 (the "Proposed Combination") and is currently scheduled to be voted on at a stockholder meeting on January 4, 2024. In particular, we believe the Proposed Combination is lacking in clear business rationale and shows signs of having been undertaken at the direction and for the benefit of Eli Casdin, who is a significant equityholder in both SomaLogic and Standard, and a member of the boards of directors of both companies.
Based on these concerns, on December 13, 2023 we filed a class action lawsuit in Delaware Chancery Court against Eli Casdin, Casdin Capital, LLC ("Casdin Capital"), members of the boards of directors of SomaLogic and Standard (the "Stockholder Complaint"). The Stockholder Complaint asserts that the defendants breached their fiduciary duties of loyalty and care and approved a merger process that was rife with conflicts, transacted at an unfair price, and undertaken for the benefit of Mr. Casdin and his affiliates and to the detriment of SomaLogic stockholders.
Independent from the Stockholder Complaint, a number of other SomaLogic stockholders have made public statements in opposition to the Proposed Combination, including a full-fledged proxy solicitation by Madryn Asset Management, LP. Together these public campaigns and the Stockholder Complaint have raised a variety of arguments against the Proposed Combination. We will not rehash all of these arguments here. Instead, the purpose of this letter is to reiterate that both of us plan to vote AGAINST the Proposed Combination and to iterate our fundamental reasons for this position.
SomaLogic Stockholder Rights. SomaLogic has not explained why it makes sense to subordinate the governance and economic rights of SomaLogic stockholders in the post-closing combined company. Despite the fact that SomaLogic stockholders will hold 57% of the combined company, they will only have the right to designate three directors to a seven-director board. In addition, SomaLogic stockholders will have their equity position effectively subordinated to the outsized preferred stock position held by Mr. Casdin and Casdin Capital in Standard, which will continue in place after closing. Mr. Casdin and Casdin Capital's preferred position has special governance and economic rights in addition to the right to receive a special payout in connection with any future sale of the combined company. These special rights have the potential to impose burdens on the former SomaLogic stockholders and to dissuade potential buyers of the combined company. Given the robust financial health of the Company, no compelling rationale has been put forward for why SomaLogic's stockholders should accept the imposition of these rights over their rights as common stockholders, all for the sake of merging with an ailing company with no clear economic upside.
No Explanation of Conflicts. Despite litigation and public criticisms, SomaLogic has still not provided an adequate explanation of the fact that Mr. Casdin was involved on both sides of the Proposed Combination at the same time as he was and continues to be the primary beneficiary of the Proposed Combination, as Mr. Casdin and Casdin Capital will possess outsized rights to control governance and economically benefit from a combined company that has been replenished with SomaLogic cash. The supplemental disclosure provided by SomaLogic on December 22, 2023 further exposed relationships between other Company directors and Eli Casdin, and we continue to believe that Mr. Casdin had significant influence over the process and its outcome.
Timing of the Transaction. The due diligence process for the acquisition appears to have been incredibly abbreviated. SomaLogic's public filings show that access to the parties' respective data rooms only opened on September 20, 2023, and the Proposed Combination was announced only two weeks later. We believe that the transaction proceeded on such an expedited timeline because certain directors had gotten wind of the process that culminated in the October 17, 2023 announcement that Thermo Fisher Scientific Inc. ("Thermo Fisher") was acquiring Olink Holding AB (publ) ("Olink") for $3,100,000,000 in cash, and feared the announcement of that deal could derail the Proposed Combination. Importantly, Olink's acquisition by Thermo Fisher makes it even more likely that Olink will discontinue business with Standard in the near future, meaning that, if anything, the relative valuation attributed to Standard in light of the Thermo Fisher-Olink acquisition should have been lower, not higher. Despite these circumstances, the deal value does not appear to account for Standard's weakened negotiating position.
No Compelling Business Rationale. SomaLogic has still not provided a compelling business rationale to justify the Proposed Combination. While SomaLogic has argued that the Proposed Combination is justified by the complementary capabilities of the two companies' products, the potential to accelerate profitability and the opportunity to increase SomaLogic's market position, we still do not understand why these highly uncertain and speculative economic arguments outweigh the fact that the Proposed Combination will combine a healthy and cash-rich company (SomaLogic) with an ailing and cash-poor company (Standard).
As we stated, the above list is not exhaustive and both the Stockholder Complaint and statements by other stockholders raise important additional arguments against the rationale of the Proposed Combination. We wanted to reiterate these concerns and restate our intention to vote AGAINST the Proposed Combination.
Sincerely,
/s/ Larry Gold
Larry Gold
/s/ Jason Cleveland
Jason Cleveland
Contact
Jason Cleveland
jpcleve@icloud.com
Media Contact
Taylor Ingraham
ASC Advisors
tingraham@ascadvisors.com
203 992 1230
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SOURCE Dr. Larry Gold and Dr. Jason Cleveland
