Bankrupt genetic analysis company 23andMe will hold a second auction for its cache of DNA data with an opening bid of $305 million from a group led by the company’s former chief executive officer, Anne Wojcicki.
The offer is nearly $50 million more than the last bid from Regeneron Pharmaceuticals, which had been declared the winner of the first auction last month, only to have the outcome challenged in court by Wojcicki. The company’s shares climbed as much as 25% to $4.96 once markets opened on Thursday.
The new auction is a compromise between Wojcicki, Regeneron and 23andMe, all of whom had come to federal court in St. Louis on Wednesday prepared to fight over the best way to set up a new round of bidding.
23andMe had initially proposed limits on the new auction that were questioned by US Bankruptcy Judge Brian Walsh. At the start of the hearing on Wednesday, Walsh asked lawyers for Regeneron and 23andMe to justify the proposed auction rules, including a $10 million breakup fee and a limit to the bidding, which he said may be “inefficient.”
Under the new rules, Wojcicki, who is partnering with a California-based research institute, would make a bid of $305 million, which Regeneron can counter with an offer that must be at least $315 million, company attorney Christopher Hopkins told Walsh. After that, Wojcicki and the research institute can make their final bid. If they do, Regeneron gets the chance to make the last offer of the auction.
“We don’t like the last look” rule that allows Regeneron to have the final bid, Wojcicki’s lawyer Susheel Kirpalani said during the hearing. But the new rules are an improvement and will allow Wojcicki and TTAM Research Institute to compete for 23andMe, he said.
Lawyers for shareholders and unsecured creditors also said they supported the new auction rules during the hearing.
All sides were in federal court in St. Louis on Wednesday to determine how to revive bidding after 23andMe held…