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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
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CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) November 3, 1998
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LIFE TECHNOLOGIES, INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-14991 34-0431300
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
9800 Medical Center Drive, Rockville, Maryland 20850
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (301) 610-8000
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Not Applicable
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
Life Technologies, Inc. (the "Company") has been advised by letter, dated
November 6, 1998, from Dexter Corporation ("Dexter") that the Tender Offer
Statement on Schedule 14D-1 of Dexter Acquisition Delaware, Inc. and Dexter,
dated November 2, 1998, contains views of the Dexter-affiliated directors of the
Company regarding the circumstances surrounding the disagreement referred to in
Item 6 below.
ITEM 6. RESIGNATIONS OF REGISTRANT'S DIRECTORS.
Effective November 3, 1998, Frank E. Samuel, Jr. and Iain C. Wylie resigned
as members of the board of directors of the Company. In their letters of
resignation, Messrs. Samuel and Wylie cited their disagreement with certain
actions taken by the Company's board of directors, a majority of whom are
affiliated with Dexter, the majority stockholder of the Company, and certain
actions taken by Dexter in connection with a proposal made by Dexter on July 7,
1998 to purchase all shares of the Company not owned by it for a price of $37.00
per share in cash. Specifically, Messrs. Samuel and Wylie indicated their
disagreement with the decision by the five Dexter affiliates on the Company's
board to disband the special committee of independent directors of the Company,
of which Messrs. Samuel and Wylie were two of three members, that had been
formed to consider the Dexter proposal on behalf of the Company's public
stockholders. Copies of the letters of resignation (including attachments) of
Messrs. Samuel and Wylie are filed herewith as Exhibits 17.1 and 17.2,
respectively. On November 5, 1998, the Company issued the press release filed
herewith as Exhibit 99.
ITEM 7. EXHIBITS.
17.1 Letter dated November 3, 1998 from Frank E. Samuel, Jr. to the Board
of Directors of the Company, together with the Joint Statement of the
Former Members of the Special Committee and the June 2, 1998 letter
to the Chairman of Dexter objecting to the Company stock repurchase
plan referred to therein
17.2 Letter dated November 3, 1998 from Iain C. Wylie to the Board of
Directors of the Company, together with the Joint Statement of the
Former Members of the Special Committee referred to therein
99 Press release, dated November 5, 1998
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SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
LIFE TECHNOLOGIES, INC.
Date: November 6, 1998 By: /s/ Joseph C. Stokes, Jr.
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Name: Joseph C. Stokes, Jr.
Title: Senior Vice President and
Chief Financial Officer
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EXHIBIT INDEX
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17.1 Letter dated November 3, 1998 from Frank E. Samuel, Jr. to the Board of
Directors of the Company, together with the Joint Statement of the Former
Members of the Special Committee and the June 2, 1998 letter to the
Chairman of Dexter objecting to the Company stock repurchase plan referred
to therein
17.2 Letter dated November 3, 1998 from Iain C. Wylie to the Board of Directors
of the Company, together with the Joint Statement of the Former Members of
the Special Committee referred to therein
99 Press release, dated November 5, 1998
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EXHIBIT 17.1
FRANK E. SAMUEL, JR.
SUITE 300
11000 CEDAR AVENUE
CLEVELAND, OHIO 44106
November 3, 1998
Board of Directors
Life Technologies, Inc.
9800 Medical Center Drive
Rockville, Maryland 20850
Dear Fellow Board Members:
On October 27, 1998, the representatives of Dexter Corporation serving
on our Board of Directors took the extraordinary step of disbanding the Special
Committee of independent directors -- apparently in response to the Special
Committee's refusal to approve a transaction between LTI and Dexter Corporation
at a price that the Special Committee believed was not fair to LTI's public
stockholders. This inappropriate act, taken upon the motion of the Chairman of
the Board, who is also the Chairman of the Board of Dexter Corporation, occurred
without discussion (even though discussion was requested by myself, an
independent director), and over the objection of all three members of the
Special Committee. This act, together with the events of the past several
months and the behavior of those directors who represent Dexter Corporation on
this Board, has made it impossible for me to fulfill my primary obligation as a
director: to represent and act in the best interest of LTI's stockholders.
Consequently, I hereby resign from the Board of Directors of Life Technologies,
Inc., effective immediately.
My decision to resign is made with the greatest reluctance. I have
served as a director of LTI since April of 1996. I am proud of my association
with the Company, its outstanding management team and its many achievements.
Consequently, my decision to resign, and Dexter's heavy-handed activities over
an extended period of time that led to it, leave me not only with a profound
sense of disappointment, but, more importantly, with deep concern as to the
fairness of the treatment that LTI's public stockholders can expect to receive
in the future from the Dexter majority on this Board.
A joint statement of the members of the Special Committee, which
outlines in greater detail the reasons for the Special Committee's conclusion
that $37 per share is not an appropriate valuation for LTI, is attached as Annex
A to this letter. As that statement makes clear, Dexter and the Special
Committee appeared to have substantial disagreements as to the proper approach
for determining an appropriate value for the Company. In particular, the
Special Committee strongly believed that in arriving at its $37 per share price,
Dexter had not given sufficient credit to, or had ignored, important components
of LTI's overall value, including the value of the products in LTI's R&D
pipeline. The Special Committee, calling upon its expert
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Board of Directors
Life Technologies, Inc.
November 3, 1998
advisors as well as each member's individual expertise, spent a great deal of
time studying these issues.
I am troubled by several features of the situation as it unfolded:
Dexter's refusal to consider or even discuss the issues relating to LTI's value
raised by the Special Committee, the termination of the Special Committee by the
Chairman of the Board and his conflicted colleagues, and Dexter's coercive
attempt to buy out the LTI public stockholders at a price which, I believe,
deprives these stockholders of the significant inherent values to which they are
rightfully entitled. This is particularly troubling because, as has been
discussed by LTI Board members from time to time, LTI is a difficult company to
value without intensive study. This is both because a significant part of the
value of LTI is in its R&D pipeline, the details of which are not fully public,
and because LTI receives very little analyst coverage from Wall Street due to
Dexter's majority position.
These are points, indeed, about which I had written earlier this year
to Grahame Walker, chairman of the Dexter and LTI boards (a copy of my letter to
Grahame is attached as Annex B). The analysis performed by Goldman, Sachs & Co.
(the Special Committee's financial advisor) was probably the first time that a
rigorous, independent study of LTI and its prospects had ever been undertaken.
It was not surprising to me -- for reasons reflected in my letter to Grahame --
that Goldman Sachs' analysis supported a higher value than had been attributed
to LTI by the market prior to the Dexter proposal. I now fully expect that,
once LTI is wholly owned by Dexter, the "New Dexter", without the former LTI
public stockholders, will find Goldman Sachs' analysis to be persuasive as it
tells LTI's promising story to its investors.
In summary, with the termination of the Special Committee, I believe
that I am no longer able to represent the interests of and protect the public
stockholders the constituency the Special Committee was charged with
protecting. Consequently, I have no choice but to resign from the LTI Board of
Directors. Pursuant to the federal securities laws, I hereby request that this
letter and my disagreement with the actions taken by the Dexter representatives
on the Board of Directors be disclosed to LTI's public stockholders by filing
this letter (including the attachments) as an exhibit to an LTI Form 8-K filed
with the Securities and Exchange Commission. Any questions regarding this
matter should be directed to my counsel, David A. Katz of Wachtell, Lipton,
Rosen & Katz.
Sincerely,
/s/ Frank E. Samuel, Jr.
Frank E. Samuel, Jr.
Attachments
cc: David A. Katz
2
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ANNEX A
JOINT STATEMENT OF THE
FORMER MEMBERS OF THE SPECIAL COMMITTEE OF INDEPENDENT DIRECTORS OF
LIFE TECHNOLOGIES, INC.
__________________
SUMMARY.
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For the reasons described below under "Reasons for the Special
Committee's Recommendation," the Special Committee of Independent Directors of
Life Technologies, Inc. ("LTI") determined that Dexter Corporation's proposal to
purchase all of the shares of LTI that it does not already own at a price of $37
per share in cash would not adequately compensate LTI's public stockholders for
the inherent value of their LTI shares. Consequently, the Special Committee was
unwilling to recommend that LTI's public stockholders accept Dexter's $37 per
share proposal.
BACKGROUND OF THE COMMITTEE'S ACTIVITIES.
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In May 1998, LTI's scheduled share repurchase was suspended by order
of Dexter Corporation without notice to the LTI Board. This repurchase program
had been the subject of extensive discussion by the LTI Board over many months
in fact, the Chairman of the Board had specifically directed that the share
repurchase be pursued expeditiously but the LTI Board was not informed that the
repurchase program was suspended, and no public announcement was ever made.
On July 7, 1998, Dexter Corporation, which at that time owned
approximately 52% of the outstanding shares of common stock of LTI, publicly
announced its proposal to acquire the remaining 48% of LTI that it did not
already own at a price of $37 per share in cash. As was the case with the
canceling of the share repurchase, Dexter made this announcement without advance
notice to or consultation with the LTI Board. At a meeting of the LTI Board
that day, the LTI Board appointed directors Thomas H. Adams, Frank E. Samuel,
Jr., and Iain C. Wylie as a Special Committee of independent directors charged
with evaluating and responding to Dexter's proposal on behalf of LTI's public
stockholders. Messrs. Adams, Samuel and Wylie were the only independent members
of the LTI Board; each of the other directors was either an officer of LTI, or
an officer or director of Dexter.* In addition, each of Messrs. Adams, Samuel
and Wylie possess significant expertise in the life sciences which all but one
of the Dexter representatives do not. The Special Committee engaged Wachtell,
Lipton, Rosen & Katz as its
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* Subsequently, an independent director (who was not a member of the Special
Committee) resigned to pursue other opportunities (unrelated to the Dexter
proposal), and the Chairman of the Board recommended that another director
affiliated with Dexter be appointed to the LTI Board of Directors to replace the
resigning director. A replacement director for the resigning director was
required in order to keep the LTI Board at the size required by LTI's
certificate of incorporation. However, there was no requirement that the
replacement director be affiliated with Dexter. Since there was no reason to
give Dexter clear control of the LTI Board (i.e., five of nine directors) or to
appoint another Dexter-affiliated director in the context of an interested party
transaction, the two members of the Special Committee who were present at the
relevant meeting voted against electing the new director.
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counsel and, after interviewing a number of financial advisory firms, engaged
Goldman, Sachs & Co. as its financial advisor.
Shortly thereafter, the Special Committee and its legal and financial
advisors commenced their effort to respond to the Dexter proposal. This effort
began with an intensive, cooperative effort among the Special Committee, Goldman
Sachs and senior management of the Company to analyze and understand the various
contributing factors to LTI's inherent value. As has been discussed by the LTI
Board from time to time in the past, LTI is a difficult company to value without
intensive study for at least two reasons: first, because a significant part of
its future success and value is dependent upon the success and value of products
that currently are only under development the so-called "R&D pipeline" -- the
details of which are not fully public for competitive and other reasons
(although Dexter has been well aware of them for some time); and second, because
LTI receives very little analyst coverage from Wall Street, primarily due to
Dexter's majority position. Because there is substantial information relating
to the value of LTI that has not been made available to the public stockholders,
the Special Committee felt a special obligation to evaluate these assets in
order to ensure that Dexter not unfairly profit from its inside status at the
expense of the public stockholders.
The Special Committee began by attempting to understand and evaluate
the Company's strategic plan, including a highly detailed analysis of the
Company's R&D pipeline. In this connection, with the assistance of Goldman
Sachs and senior management of the Company, the Special Committee reviewed all
of the Company's major assets, including sequencing technologies, transgenics,
and the cDNA library, and then analyzed the R&D pipeline on a product-by-product
basis in order to understand the success probabilities of each of the products
and the implications for LTI, the LTI stockholders, and the financial
projections contained in the base strategic plan. Among other things, the
analysis indicated that the commercialization of some of the major products in
the R&D pipeline could be expected to lead to an expansion of the Company's
earnings growth trajectory. The Special Committee and its advisors then
thoroughly analyzed LTI's financial projections, including spending a
significant amount of time questioning and pressing management on the viability
and achievability of the projections reflected in the strategic plan, as well as
separately analyzing the R&D pipeline.
Based on this work, in August and early September Goldman Sachs and
the Special Committee broke its valuation analysis into two components: (1) the
ongoing operations of the Company, and (2) the R&D pipeline. Application of
standard valuation techniques to these two components by Goldman Sachs indicated
discounted cash flow value ranges for the ongoing operations and for the R&D
pipeline which, when added together, supported values significantly in excess of
$37 per share. In the case of the R&D pipeline, Goldman Sachs based its
analysis on a product by product probability-of-success analysis, with each
probability supplied by management. In addition, in its discounted cash flow
analyses, Goldman Sachs applied significantly higher discount rates to the R&D
pipeline than it did to the ongoing operations. Consequently, the Special
Committee believed, based in part on Goldman Sachs' work, that the results
indicated by the R&D pipeline analysis were conservative and not speculative.
3
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In addition to the discounted cash flow analyses, the Special
Committee also considered (i) LTI's recent and historical stock price
performance, (ii) LTI's investor base and investment positions, (iii) LTI's
historical business and financial performance and prospects, (iv) comparable
public company stock values, (v) a review of premiums paid in prior life
sciences industry acquisitions, and (vi) a review of premiums paid in prior
minority buy-out transactions.
In September, after more than six weeks of this intensive work by the
Special Committee and its legal and financial advisors, the Special Committee
informed Dexter that, based on the work done as of that time, the Special
Committee had concluded that $37 per share was not an appropriate valuation, and
that the Special Committee was not prepared to recommend Dexter's offer to LTI's
public stockholders. In particular, the Special Committee told Dexter that the
analytical work performed by the Special Committee and its advisors had led it
to conclude that Dexter's $37 per share offer appropriately reflected neither
the substantial values indicated in the Company's base strategic plan nor the
incremental value of the Company's R&D pipeline. The Special Committee chose to
engage in private discussions, rather than public negotiations, with Dexter in
order to attempt to minimize any potential harm to LTI from the process which
Dexter initiated. The Special Committee believed that a public disagreement on
the values inherent in LTI's base business as well as its very attractive R&D
pipeline would ill serve the constituencies that the Special Committee was
charged with protecting.
The Special Committee also informed Dexter that the Special Committee
had been approached by a third party interested in acquiring all of LTI at a
price in excess of Dexter's $37 offer. Because Dexter has previously stated
that it is not interested in reducing its position in LTI, the Special Committee
could not respond to this third-party contact. Nevertheless, the Special
Committee found it highly significant that the values indicated in the third
party approach exceeded the value Dexter offered even though the third party did
not have access to the substantial inside information (including with respect to
the R&D pipeline) to which Dexter has had continued access, both through its
board representation and in connection with the proposed transaction.
Based on the work it had done as of that time, the Special Committee
believed that the differing valuation approaches applied by Goldman Sachs and by
Merrill Lynch, Dexter's financial advisor, together with Merrill Lynch's
admitted failure to attribute any meaningful value to the R&D pipeline,
accounted for the gap between Dexter and the Special Committee. In particular,
the Special Committee believed that both the R&D pipeline and LTI's current
product portfolio could be valued objectively, and that once Dexter and Merrill
Lynch understood the significance and value of the R&D pipeline and the current
product portfolio, a common ground eventually could be found for a transaction
that would provide fair value to LTI's public stockholders. Dexter agreed that
Merrill Lynch and Goldman Sachs should meet to discuss their respective
valuation analyses. To this end, the Special Committee continued its work for
an additional five weeks and, among other things, (1) instructed Goldman Sachs
to meet with Merrill Lynch in order to see if a common approach to valuing LTI
could be agreed upon, and (2) arranged meetings among the Special Committee,
Goldman Sachs, Merrill Lynch and the
4
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Company's senior management to review the R&D pipeline and other components of
LTI's strategic plan.
During one of these meetings in late October, Merrill Lynch raised
certain issues concerning several of the important assumptions underlying the
analysis performed by the Special Committee and its financial advisor. These
issues included (1) the impact of recent economic developments in international
markets; (2) the impact of current stock market conditions; (3) whether LTI can
maintain market share growth without sacrificing margins; and (4) the Company's
ability to successfully commercialize the products in the R&D pipeline.
Although the Special Committee had considered each of these issues, the Special
Committee asked Goldman Sachs to do additional work and perform additional
analyses directly related to these issues, and the Special Committee personally
questioned the Company's senior management on these matters (other than issue
(2), with respect to which management was presumed to have no particular
expertise). The result of our investigation of these issues was to reinforce
---------
rather than to diminish, our view that Dexter's $37 per share offer did not
- -----------------------
fully reflect the values inherent in LTI. Among other things, the Special
Committee determined or was informed by LTI's management:
. with respect to the impact of recent economic developments:
(i) international economic conditions had negatively impacted only Asia
and Latin America, which constitute very small parts of LTI's overall
business; (ii) the expectation that a weakening dollar relative to
European currencies will generate greater income and larger margins
for the European region, which represents more than one-third of LTI's
business, and the belief that LTI management has positioned LTI to
take advantage of this situation; (iii) customer orders have held firm
and LTI has a lengthy list of new customers; and (iv) the National
Institutes of Health has increased, not decreased its budget;
. with respect to market share gain: (i) base case growth is projected to
be strongest in high margin products; and (ii) LTI plans to continue
necessary cost restructuring to maintain margins; and
. with respect to the Company's ability to successfully commercialize the
products in the R&D pipeline: (i) the Company has several recent
examples of new products that have been developed and commercialized
effectively, including Custom Primers and Platinum Paq, and has had
significant success in new product introductions; and (ii) the Company
has assigned dedicated experienced teams to its major
commercialization efforts, including to the Gateway line and
Amplification program.
In addition, on October 22, 1998, Goldman Sachs presented the Special
Committee with an update to its September valuation analysis. Among other
things, Goldman Sachs' presentation indicated discounted cash flow value ranges
for the ongoing operations and for the R&D pipeline that, when added together,
indicated a total Company value range of $36.32 to $51.81. Goldman Sachs also
noted for the Special Committee that the assumptions used in arriving at the
discounted cash flow value range for the R&D pipeline were more conservative
than those used in the September presentation and included sensitivity analyses
that
5
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significantly discounted management's actual expectations. Similarly, the
discounted cash flow ranges for the Company as a whole reflected sensitivities
to potential softness in market and economic conditions.
Based on this reaffirmation of its view that $37 per share would not
appropriately compensate LTI's public stockholders, the Special Committee
instructed Goldman Sachs to convey its responses to the issues raised by Merrill
Lynch to Merrill Lynch in the hope that productive discussions leading to a fair
transaction could result. Such discussions occurred on October 26, 1998. But
prior to that time, K. Grahame Walker, exercising his power as chairman of the
Board of LTI, called a special meeting of the Board of Directors of LTI on
October 27, 1998. No agenda was provided for this meeting, but Mr. Walker
indicated to one member of the Special Committee that he expected to receive an
update from the Special Committee.
At the October 27 Board meeting, the Special Committee informed the
Board that Dexter had so far failed to convince the Special Committee that $37
per share is an appropriate valuation and that, based on its work and the
information provided by Dexter and the Company, the Special Committee was not
prepared to recommend Dexter's offer to LTI's public stockholders. The Special
Committee also made clear, however, that it and its advisors stood ready to
review any additional information and to consider any revised proposal that
Dexter cared to make. Mr. Walker instead demanded that Dr. Adams, the Special
Committee's chairman, state a price that the Special Committee would be willing
to approve. Dr. Adams declined to do so, and instead reiterated the Special
Committee's offer to consider additional information or a new proposal from
Dexter. Following Mr. Walker's repeated requests for a specific price the
Special Committee would be willing to approve, Dr. Adams informed the Board of
the same information that Goldman Sachs had conveyed to Merrill Lynch earlier in
the day, namely (i) that the Special Committee saw the logic of a price in the
$50+ range per share but believed Dexter would be unwilling to offer such a
price, (ii) that the Special Committee was not prepared to recommend the $37 per
share price in Dexter's proposal or any price in the $30s, and (iii) that the
Special Committee was willing to consider any new proposal. Finding Dr. Adams'
response unacceptable, Mr. Walker stated that the Special Committee's usefulness
had ended and disclosed that Dexter would announce that it had withdrawn its
proposal and that Dexter had decided to proceed directly with a tender offer to
LTI's stockholders. He then proposed to the LTI Board that the Special
Committee be disbanded. Overruling a direct request from an independent
director that the wisdom of such an action be discussed prior to such a vote,
the five Dexter representatives on the LTI Board approved the disbanding of the
Special Committee, with all three members of the Special Committee voting
against disbanding.
REASONS FOR THE SPECIAL COMMITTEE'S RECOMMENDATION.
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The former members of the Special Committee unanimously agree that
Dexter Corporation's proposal to purchase all of the shares of LTI that it does
not already own at a price of $37 per share in cash would not adequately
compensate LTI's public stockholders for the inherent value of their LTI shares.
Consequently, the Special Committee was unwilling to recommend that LTI's public
stockholders accept Dexter's $37 per share proposal.
6
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In particular, the Special Committee believes that Dexter Corporation
has ignored or omitted from its $37 per share value significant components to
LTI's long term inherent value and earning power. Foremost among these is the
value of the products in LTI's R&D pipeline that have not yet been
commercialized. Even using conservative assumptions and probability discounts
to account for the probabilities of success associated with these products, the
Special Committee determined that the R&D pipeline has significant value that
LTI's public stockholders are entitled to be compensated for and that are not
reflected in Dexter's $37 per share offer.
In addition to the foregoing, in reaching its conclusions, the former
members of the Special Committee considered the following material factors:
(i) the Special Committee's expectation of LTI's operating and
financial performance on a "status quo" (no change in Dexter ownership)
basis, taking into account, among other things:
. historical information concerning the business, operations,
financial condition and operating results of LTI; and
. certain projections provided by LTI management concerning the
prospects and financial and operating performance of LTI;
(ii) certain stock market and related financial indicators, including:
. the recent and historical trading prices and market multiples
of LTI common stock;
. LTI's investor base and investment positions;
. comparable public company stock values;
. a review of premiums paid in prior life sciences industry
acquisitions; and
. a review of premiums paid in prior minority buy-out
transactions;
(iii) the multiple presentations by senior management of LTI
concerning the products under development in LTI's R&D pipeline, including
management's product by product assessment of the potential revenue
associated with each such product and the probability of success or failure
of each such product, and Goldman Sachs' comprehensive analysis of the R&D
pipeline information provided by management, including the application of
appropriate probability discounts and the presentation of informative
probability and sensitivity analyses;
(iv) the fact that each of the members of the Special Committee has
significant expertise and professional experience in the life sciences,
whereas all but one of the Dexter-affiliated directors do not;
7
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(v) the fact that the details of the R&D pipeline had not been made
fully public (for competitive and other reasons) and therefore was not
fully reflected in LTI's stock price, together with the fact that Dexter,
unlike the public stockholders, had had access to such information for some
time;
(vi) the fact that, because a significant part of the value of LTI is
in its R&D pipeline, the details of which are not fully public, and because
LTI receives very little analyst coverage from Wall Street due to Dexter's
majority position, mere application of a premium to current trading prices
would not be a sufficient approach to valuing LTI, and that intensive,
rigorous study -- of the type performed by the Special Committee with the
assistance of Goldman Sachs -- would be required;
(vii) the bullet points following the tenth paragraph above under
"Background of the Committee's Activities";
(viii) the unsolicited views of certain significant LTI stockholders
who believed that $37 per share was not a fair price and that a higher
price was required to properly compensate the LTI public stockholders.
In view of the variety of factors and the amount of information
considered, the former members of the Special Committee did not find it
practicable to and did not make specific assessments of, quantify or otherwise
assign relative weights to the specific factors considered in reaching its
determination. The determination was made after consideration of all of the
factors as a whole.
/s/ Thomas H. Adams /s/ Frank E. Samuel, Jr. /s/ Iain C. Wylie
- ----------------------- ------------------------- -------------------------
Thomas H. Adams, Ph. D., Frank E. Samuel, Jr. Iain C. Wylie
Chairman
8
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ANNEX B
EDISON BIOTECHNOLOGY CENTER
June 2, 1998
PERSONAL AND CONFIDENTIAL
Mr. K. Grahame Walker
Chairman of the Board
Life Technologies, Inc.
One Elm Street
Windsor Locks, CT 06096
Dear Grahame:
At the conclusion of the LTI Board lunch in April, you suggested that I
reconsider my opposition to the stock re-purchase plan in light of the
"overwhelming" approval of the plan by the shareholders, whom I was elected to
represent. I have done so, and see no new factor that would require me to
change my position. Let me say that I have always assumed that the plan would
receive majority support from the LTI shareholders. Thus, for me, it is only
the size of the majority vote that is now known.
My analysis proceeds as follows.
First, there are special factors relating to the Dexter holding that I
shall set aside for the moment.
Second, when Dexter's 52% interest is subtracted from the 88% of the total
votes cast in favor of the re-purchase, 36% of LTI shares were voted to approve
the plan. 14% were either voted against the plan or abstained. This is
obviously still a large majority, but not so overwhelming as to render a
minority view irrational.
Third, philosophical tenets about the general importance of minority views
aside, the minority view in this case is persuasive, for the following reasons.
1) Internal growth does not appear to provide the prospect of
appropriate increase in LTI shareholder value. Acquisitions are, consequently,
essential to greater shareholder value. Given the existence of a majority
shareholding, LTI begins the acquisition hunt at a disadvantage -- in spite of
its high share price, which in ordinary situations would endow the company with
an extremely attractive medium with which to finance acquisitions -- compared to
other potential acquirers because it cannot effectively use its shares as
consideration for an
<PAGE>
Mr. Walker - Personal and Confidential
June 2, 1998
Page 2
acquisition. Therefore, cash is of greater relative importance to its prospects
for increasing shareholder value than it otherwise would be. Accumulating cash
has, therefore, an overwhelming importance for increasing shareholder value.
Anything that applies cash to purposes other than acquisitions or significant
opportunities for enhancing internal growth has, therefore, a low priority.
This includes, in my view, not only share re-purchases, but dividends as well,
but I will not argue this point in view of LTI's history of paying dividends.
2) Share re-purchases have two aspects: the signal to the market that
the Board believes the shares at current prices are undervalued and increases in
share value and earnings that occur because of actual re-purchases. In this
case, there may be some value from the signal, even though LTI stock is trading
near its high -- not, by the way, an ordinary case for a stock buyback. More
important, actual re-purchases deplete cash in return for modest EPS gains; an
objective that is inconsistent with the cash retention objectives that are for
LTI the key to increasing shareholder value.
3) LTI is penalized in the market by the narrow float caused by the
Dexter holding. Because trading is thin, the company is followed by second tier
analysts and receives inadequate investor attention in comparison to its key
position in the biotechnology field. Any reduction of the float would only
serve to exacerbate these problems. The result of more analyst and investor
attention to the company's fundamentals could only increase share price.
Fourth, I recognize that current shareholders might conclude that the value
of their shares would be increased by a share re-purchase. There are a variety
of reasons for this conclusion that are plausible. Current financial
shareholders would, in general, favor any move that increased the price at
which they could sell their shares. They may well have given insufficient
consideration to how a narrower float would affect analyst and future investor
attention to the company's stock and thus its longer term prospects in the
market. Or there may have been "group think": if it's good for GE, it must be
good for LTI. Whatever the reasons for current stockholders to approve a re-
purchase, the LTI Board should take a view that ensures a market in which
investors can profitably buy and sell LTI shares over time. Benefitting current
shareholders is a factor, but not the only one, that the LTI Board should take
into account.
Fifth, As I indicated above, the majority Dexter shareholding is worth
separate consideration. You have clearly stated to the LTI Board that, wearing
your Dexter hat, you would never allow Dexter's ownership to drop below 50%, a
situation that would have occured in the near term without the share re-
purchase. I do not know the reasons for this position, but it appears to be
unrelated to any factor that is intended to increase LTI shareholder value,
specifically including the value of LTI stock to The Dexter Corporation as an
LTI shareholder. Indeed, the position seems to conflict with the objective of
increasing shareholder value, because
<PAGE>
Mr. Walker - Personal and Confidential
June 2, 1998
Page 3
it suggests that LTI assets will be used to maintain Dexter's majority holding
without respect to alternative deployment of those assets. In this case,
because Dexter's 52% holding was voted in favor of the re-purchase plan
principally in order to maintain Dexter's majority interest -- a reason that is
essentially different from that of any other shareholder -- I do not count it in
considering whether the majority vote was so large as to preclude another view.
In summary, having reviewed the results of the shareholder vote, I find
nothing to cause me to change my mind: the re-purchase remains a misuse of LTI
cash, and I would vote against it again were it to come before the Board.
But there is a final consideration. As you correctly pointed out,
majorities of both the Board and the shareholders voted to approve the buy-back,
and the company announced its intention to pursue that course. Indeed, as I
recall, the Board minutes include a statement that the buy-back would be pursued
expeditiously. Much as I disagree with the intended course, I nevertheless
believe that the company now has no choice but to proceed in accord with its
stated intentions. I also think that the Board should be kept abreast of
implementation of the repurchase plan and shall look forward to reports from
management from time to time.
As a last point: one hardly needs the news of the American Home/Monsanto
acquisition to know that significant consolidation is underway among our
customers and competitors. I remain concerned that LTI is hobbled in aggressive
pursuit of acquisition targets. Unless we change our intensity, I fear that the
value of the LTI business may slowly wither, as others are more successful in
playing the consolidation game. This would serve well no one involved with the
company.
Sincerely,
/s/ Frank E. Samuel, Jr.
Frank E. Samuel Jr.
<PAGE>
EXHIBIT 17.2
31, High Point,
Pirton Road,
Hitchin, Herts,
SG5 2BH,
England
The Board of Directors,
Life Technologies, Inc.,
9800 Medical center Drive,
Rockville,
Maryland 20850,
U.S.A.
3 November, 1998.
Dear Members of the Board,
Following the decision on October 27 of the Dexter members on the LTI Board to
disband the Special Committee, apparently in response to our refusal to
recommend Dexter's $37 per share offer to the minority public shareholders, I
feel I am now unable to fulfill my obligation to these shareholders. This makes
my position as an LTI Director untenable, and I must regretfully tender my
resignation effective immediately.
I say regretfully sincerely, as I consider LTI to be an outstanding Company with
an exceptional management team and tremendous potential. It has been a
privilege and a pleasure to serve as a Board member.
A definitive statement regarding the Special Committee's Process is attached,
but I would just like to comment that, while I intentionally approached my
Special Committee responsibility with no preconceptions as to the fairness of
the Dexter offer, the intensive due diligence carried out during the past months
has convinced me that LTI has significant value, both in its base business and
the R+D Pipeline, which is not reflected in the Dexter Board's current bid.
I am sure you are aware that LTI's present share price reflects (1) the lack of
following by significant Wall Street Analysts and (2) the fact that LTI has
operated for some years in Dexter's `shadow' as the majority shareholder.
However, the Special Committee's remit was to examine the underlying value of
the Company, not its short-term share price. The Committee and its advisers
were genuinely deeply committed to this Process; it has been hard for me to
understand Dexter's unwillingness to become involved in the evaluation of what
is likely to be its major business in the future and to continually ignore the
bases for our conclusions. As an example, I believe the detailed development
and evaluation of the R+D Pipeline to be of major value to the future direction
of LTI.
<PAGE>
-2-
In its dealings with Dexter's advisers, the Special Committee took Merrill
Lynch's questions and comments very seriously as a sign that they were
interested in discussing our findings, put significant effort into researching
answers, and gave Merrill clear value ranges on several occasions that resulted
from our work. The fact that these were discounted without serious discussion
or consideration both troubled and mystified me. I was led to conclude from
their comments and comparables that the Dexter advisers were less familiar with
this complex and sophisticated field of biotechnology than we could have hoped.
Certainly three of the main assumptions in their advice to Dexter seemed to
indicate this. These were: a less than credible R+D programme in spite of
detailed, conservative and fully substantiated presentations by Management, a
questionable LTI track record, while its historical performance has been
exemplary, and general decline in business markets, of which there is no
significant evidence in this specialist area.
Whatever the reasons were for this uncooperative approach with an otherwise
constructive process, and for the summary disbanding without discussion of the
Special Committee, sadly I feel that the climate created has made it impossible
for me to contribute effectively as a Director of LTI. I would therefore
respectfully request that this letter with the attached statement be filed as an
exhibit to an LTI Form 8-K filed with the SEC. Please direct any questions to
my counsel, David Katz of Wachtell, Lipton, Rosen & Katz.
Yours sincerely,
/s/ Iain C. Wylie
Iain C. Wylie
<PAGE>
JOINT STATEMENT OF THE
FORMER MEMBERS OF THE SPECIAL COMMITTEE OF INDEPENDENT DIRECTORS OF
LIFE TECHNOLOGIES, INC.
SUMMARY.
- -------
For the reasons described below under "Reasons for the Special
Committee's Recommendation," the Special Committee of Independent Directors of
Life Technologies, Inc. ("LTI") determined that Dexter Corporation's proposal to
purchase all of the shares of LTI that it does not already own at a price of $37
per share in cash would not adequately compensate LTI's public stockholders for
the inherent value of their LTI shares. Consequently, the Special Committee was
unwilling to recommend that LTI's public stockholders accept Dexter's $37 per
share proposal.
BACKGROUND OF THE COMMITTEE'S ACTIVITIES.
- -----------------------------------------
In May 1998, LTI's scheduled share repurchase was suspended by order
of Dexter Corporation without notice to the LTI Board. This repurchase program
had been the subject of extensive discussion by the LTI Board over many months
in fact, the Chairman of the Board had specifically directed that the share
repurchase be pursued expeditiously but the LTI Board was not informed that the
repurchase program was suspended, and no public announcement was ever made.
On July 7, 1998, Dexter Corporation, which at that time owned
approximately 52% of the outstanding shares of common stock of LTI, publicly
announced its proposal to acquire the remaining 48% of LTI that it did not
already own at a price of $37 per share in cash. As was the case with the
canceling of the share repurchase, Dexter made this announcement without advance
notice to or consultation with the LTI Board. At a meeting of the LTI Board
that day, the LTI Board appointed directors Thomas H. Adams, Frank E. Samuel,
Jr., and Iain C. Wylie as a Special Committee of independent directors charged
with evaluating and responding to Dexter's proposal on behalf of LTI's public
stockholders. Messrs. Adams, Samuel and Wylie were the only independent members
of the LTI Board; each of the other directors was either an officer of LTI, or
an officer or director of Dexter.* In addition, each of Messrs. Adams, Samuel
and Wylie possess significant expertise in the life sciences which all but one
of the Dexter representatives do not. The Special Committee engaged Wachtell,
Lipton, Rosen & Katz as its
- -----------
* Subsequently, an independent director (who was not a member of the Special
Committee) resigned to pursue other opportunities (unrelated to the Dexter
proposal), and the Chairman of the Board recommended that another director
affiliated with Dexter be appointed to the LTI Board of Directors to replace the
resigning director. A replacement director for the resigning director was
required in order to keep the LTI Board at the size required by LTI's
certificate of incorporation. However, there was no requirement that the
replacement director be affiliated with Dexter. Since there was no reason to
give Dexter clear control of the LTI Board (i.e., five of nine directors) or to
appoint another Dexter-affiliated director in the context of an interested party
transaction, the two members of the Special Committee who were present at the
relevant meeting voted against electing the new director.
<PAGE>
counsel and, after interviewing a number of financial advisory firms, engaged
Goldman, Sachs & Co. as its financial advisor.
Shortly thereafter, the Special Committee and its legal and financial
advisors commenced their effort to respond to the Dexter proposal. This effort
began with an intensive, cooperative effort among the Special Committee, Goldman
Sachs and senior management of the Company to analyze and understand the various
contributing factors to LTI's inherent value. As has been discussed by the LTI
Board from time to time in the past, LTI is a difficult company to value without
intensive study for at least two reasons: first, because a significant part of
its future success and value is dependent upon the success and value of products
that currently are only under development the so-called "R&D pipeline" -- the
details of which are not fully public for competitive and other reasons
(although Dexter has been well aware of them for some time); and second, because
LTI receives very little analyst coverage from Wall Street, primarily due to
Dexter's majority position. Because there is substantial information relating
to the value of LTI that has not been made available to the public stockholders,
the Special Committee felt a special obligation to evaluate these assets in
order to ensure that Dexter not unfairly profit from its inside status at the
expense of the public stockholders.
The Special Committee began by attempting to understand and evaluate
the Company's strategic plan, including a highly detailed analysis of the
Company's R&D pipeline. In this connection, with the assistance of Goldman
Sachs and senior management of the Company, the Special Committee reviewed all
of the Company's major assets, including sequencing technologies, transgenics,
and the cDNA library, and then analyzed the R&D pipeline on a product-by-product
basis in order to understand the success probabilities of each of the products
and the implications for LTI, the LTI stockholders, and the financial
projections contained in the base strategic plan. Among other things, the
analysis indicated that the commercialization of some of the major products in
the R&D pipeline could be expected to lead to an expansion of the Company's
earnings growth trajectory. The Special Committee and its advisors then
thoroughly analyzed LTI's financial projections, including spending a
significant amount of time questioning and pressing management on the viability
and achievability of the projections reflected in the strategic plan, as well as
separately analyzing the R&D pipeline.
Based on this work, in August and early September Goldman Sachs and
the Special Committee broke its valuation analysis into two components: (1) the
ongoing operations of the Company, and (2) the R&D pipeline. Application of
standard valuation techniques to these two components by Goldman Sachs indicated
discounted cash flow value ranges for the ongoing operations and for the R&D
pipeline which, when added together, supported values significantly in excess of
$37 per share. In the case of the R&D pipeline, Goldman Sachs based its
analysis on a product by product probability-of-success analysis, with each
probability supplied by management. In addition, in its discounted cash flow
analyses, Goldman Sachs applied significantly higher discount rates to the R&D
pipeline than it did to the ongoing operations. Consequently, the Special
Committee believed, based in part on Goldman Sachs' work, that the results
indicated by the R&D pipeline analysis were conservative and not speculative.
3
<PAGE>
In addition to the discounted cash flow analyses, the Special
Committee also considered (i) LTI's recent and historical stock price
performance, (ii) LTI's investor base and investment positions, (iii) LTI's
historical business and financial performance and prospects, (iv) comparable
public company stock values, (v) a review of premiums paid in prior life
sciences industry acquisitions, and (vi) a review of premiums paid in prior
minority buy-out transactions.
In September, after more than six weeks of this intensive work by the
Special Committee and its legal and financial advisors, the Special Committee
informed Dexter that, based on the work done as of that time, the Special
Committee had concluded that $37 per share was not an appropriate valuation, and
that the Special Committee was not prepared to recommend Dexter's offer to LTI's
public stockholders. In particular, the Special Committee told Dexter that the
analytical work performed by the Special Committee and its advisors had led it
to conclude that Dexter's $37 per share offer appropriately reflected neither
the substantial values indicated in the Company's base strategic plan nor the
incremental value of the Company's R&D pipeline. The Special Committee chose to
engage in private discussions, rather than public negotiations, with Dexter in
order to attempt to minimize any potential harm to LTI from the process which
Dexter initiated. The Special Committee believed that a public disagreement on
the values inherent in LTI's base business as well as its very attractive R&D
pipeline would ill serve the constituencies that the Special Committee was
charged with protecting.
The Special Committee also informed Dexter that the Special Committee
had been approached by a third party interested in acquiring all of LTI at a
price in excess of Dexter's $37 offer. Because Dexter has previously stated
that it is not interested in reducing its position in LTI, the Special Committee
could not respond to this third-party contact. Nevertheless, the Special
Committee found it highly significant that the values indicated in the third
party approach exceeded the value Dexter offered even though the third party did
not have access to the substantial inside information (including with respect to
the R&D pipeline) to which Dexter has had continued access, both through its
board representation and in connection with the proposed transaction.
Based on the work it had done as of that time, the Special Committee
believed that the differing valuation approaches applied by Goldman Sachs and by
Merrill Lynch, Dexter's financial advisor, together with Merrill Lynch's
admitted failure to attribute any meaningful value to the R&D pipeline,
accounted for the gap between Dexter and the Special Committee. In particular,
the Special Committee believed that both the R&D pipeline and LTI's current
product portfolio could be valued objectively, and that once Dexter and Merrill
Lynch understood the significance and value of the R&D pipeline and the current
product portfolio, a common ground eventually could be found for a transaction
that would provide fair value to LTI's public stockholders. Dexter agreed that
Merrill Lynch and Goldman Sachs should meet to discuss their respective
valuation analyses. To this end, the Special Committee continued its work for
an additional five weeks and, among other things, (1) instructed Goldman Sachs
to meet with Merrill Lynch in order to see if a common approach to valuing LTI
could be agreed upon, and (2) arranged meetings among the Special Committee,
Goldman Sachs, Merrill Lynch and the
4
<PAGE>
Company's senior management to review the R&D pipeline and other components of
LTI's strategic plan.
During one of these meetings in late October, Merrill Lynch raised
certain issues concerning several of the important assumptions underlying the
analysis performed by the Special Committee and its financial advisor. These
issues included (1) the impact of recent economic developments in international
markets; (2) the impact of current stock market conditions; (3) whether LTI can
maintain market share growth without sacrificing margins; and (4) the Company's
ability to successfully commercialize the products in the R&D pipeline.
Although the Special Committee had considered each of these issues, the Special
Committee asked Goldman Sachs to do additional work and perform additional
analyses directly related to these issues, and the Special Committee personally
questioned the Company's senior management on these matters (other than issue
(2), with respect to which management was presumed to have no particular
expertise). The result of our investigation of these issues was to reinforce
---------
rather than to diminish, our view that Dexter's $37 per share offer did not
- -----------------------
fully reflect the values inherent in LTI. Among other things, the Special
Committee determined or was informed by LTI's management:
. with respect to the impact of recent economic developments: (i)
international economic conditions had negatively impacted only Asia
and Latin America, which constitute very small parts of LTI's overall
business; (ii) the expectation that a weakening dollar relative to
European currencies will generate greater income and larger margins
for the European region, which represents more than one-third of LTI's
business, and the belief that LTI management has positioned LTI to
take advantage of this situation; (iii) customer orders have held firm
and LTI has a lengthy list of new customers; and (iv) the National
Institutes of Health has increased, not decreased its budget;
. with respect to market share gain: (i) base case growth is projected
to be strongest in high margin products; and (ii) LTI plans to
continue necessary cost restructuring to maintain margins; and
. with respect to the Company's ability to successfully commercialize
the products in the R&D pipeline: (i) the Company has several recent
examples of new products that have been developed and commercialized
effectively, including Custom Primers and Platinum Paq, and has had
significant success in new product introductions; and (ii) the Company
has assigned dedicated experienced teams to its major
commercialization efforts, including to the Gateway line and
Amplification program.
In addition, on October 22, 1998, Goldman Sachs presented the Special
Committee with an update to its September valuation analysis. Among other
things, Goldman Sachs' presentation indicated discounted cash flow value ranges
for the ongoing operations and for the R&D pipeline that, when added together,
indicated a total Company value range of $36.32 to $51.81. Goldman Sachs also
noted for the Special Committee that the assumptions used in arriving at the
discounted cash flow value range for the R&D pipeline were more conservative
than those used in the September presentation and included sensitivity analyses
that
5
<PAGE>
significantly discounted management's actual expectations. Similarly, the
discounted cash flow ranges for the Company as a whole reflected sensitivities
to potential softness in market and economic conditions.
Based on this reaffirmation of its view that $37 per share would not
appropriately compensate LTI's public stockholders, the Special Committee
instructed Goldman Sachs to convey its responses to the issues raised by Merrill
Lynch to Merrill Lynch in the hope that productive discussions leading to a fair
transaction could result. Such discussions occurred on October 26, 1998. But
prior to that time, K. Grahame Walker, exercising his power as chairman of the
Board of LTI, called a special meeting of the Board of Directors of LTI on
October 27, 1998. No agenda was provided for this meeting, but Mr. Walker
indicated to one member of the Special Committee that he expected to receive an
update from the Special Committee.
At the October 27 Board meeting, the Special Committee informed the
Board that Dexter had so far failed to convince the Special Committee that $37
per share is an appropriate valuation and that, based on its work and the
information provided by Dexter and the Company, the Special Committee was not
prepared to recommend Dexter's offer to LTI's public stockholders. The Special
Committee also made clear, however, that it and its advisors stood ready to
review any additional information and to consider any revised proposal that
Dexter cared to make. Mr. Walker instead demanded that Dr. Adams, the Special
Committee's chairman, state a price that the Special Committee would be willing
to approve. Dr. Adams declined to do so, and instead reiterated the Special
Committee's offer to consider additional information or a new proposal from
Dexter. Following Mr. Walker's repeated requests for a specific price the
Special Committee would be willing to approve, Dr. Adams informed the Board of
the same information that Goldman Sachs had conveyed to Merrill Lynch earlier in
the day, namely (i) that the Special Committee saw the logic of a price in the
$50+ range per share but believed Dexter would be unwilling to offer such a
price, (ii) that the Special Committee was not prepared to recommend the $37 per
share price in Dexter's proposal or any price in the $30s, and (iii) that the
Special Committee was willing to consider any new proposal. Finding Dr. Adams'
response unacceptable, Mr. Walker stated that the Special Committee's usefulness
had ended and disclosed that Dexter would announce that it had withdrawn its
proposal and that Dexter had decided to proceed directly with a tender offer to
LTI's stockholders. He then proposed to the LTI Board that the Special
Committee be disbanded. Overruling a direct request from an independent
director that the wisdom of such an action be discussed prior to such a vote,
the five Dexter representatives on the LTI Board approved the disbanding of the
Special Committee, with all three members of the Special Committee voting
against disbanding.
REASONS FOR THE SPECIAL COMMITTEE'S RECOMMENDATION.
- ---------------------------------------------------
The former members of the Special Committee unanimously agree that
Dexter Corporation's proposal to purchase all of the shares of LTI that it does
not already own at a price of $37 per share in cash would not adequately
compensate LTI's public stockholders for the inherent value of their LTI shares.
Consequently, the Special Committee was unwilling to recommend that LTI's public
stockholders accept Dexter's $37 per share proposal.
6
<PAGE>
In particular, the Special Committee believes that Dexter Corporation
has ignored or omitted from its $37 per share value significant components to
LTI's long term inherent value and earning power. Foremost among these is the
value of the products in LTI's R&D pipeline that have not yet been
commercialized. Even using conservative assumptions and probability discounts
to account for the probabilities of success associated with these products, the
Special Committee determined that the R&D pipeline has significant value that
LTI's public stockholders are entitled to be compensated for and that are not
reflected in Dexter's $37 per share offer.
In addition to the foregoing, in reaching its conclusions, the former
members of the Special Committee considered the following material factors:
(i) the Special Committee's expectation of LTI's operating and
financial performance on a "status quo" (no change in Dexter ownership)
basis, taking into account, among other things:
. historical information concerning the business, operations,
financial condition and operating results of LTI; and
. certain projections provided by LTI management concerning
the prospects and financial and operating performance of
LTI;
(ii) certain stock market and related financial indicators, including:
. the recent and historical trading prices and market
multiples of LTI common stock;
. LTI's investor base and investment positions;
. comparable public company stock values;
. a review of premiums paid in prior life sciences industry
acquisitions; and
. a review of premiums paid in prior minority buy-out
transactions;
(iii) the multiple presentations by senior management of LTI
concerning the products under development in LTI's R&D pipeline, including
management's product by product assessment of the potential revenue
associated with each such product and the probability of success or failure
of each such product, and Goldman Sachs' comprehensive analysis of the R&D
pipeline information provided by management, including the application of
appropriate probability discounts and the presentation of informative
probability and sensitivity analyses;
(iv) the fact that each of the members of the Special Committee has
significant expertise and professional experience in the life sciences,
whereas all but one of the Dexter-affiliated directors do not;
7
<PAGE>
(v) the fact that the details of the R&D pipeline had not been made
fully public (for competitive and other reasons) and therefore was not
fully reflected in LTI's stock price, together with the fact that Dexter,
unlike the public stockholders, had had access to such information for some
time;
(vi) the fact that, because a significant part of the value of LTI is
in its R&D pipeline, the details of which are not fully public, and because
LTI receives very little analyst coverage from Wall Street due to Dexter's
majority position, mere application of a premium to current trading prices
would not be a sufficient approach to valuing LTI, and that intensive,
rigorous study -- of the type performed by the Special Committee with the
assistance of Goldman Sachs -- would be required;
(vii) the bullet points following the tenth paragraph above under
"Background of the Committee's Activities";
(viii) the unsolicited views of certain significant LTI stockholders
who believed that $37 per share was not a fair price and that a higher
price was required to properly compensate the LTI public stockholders.
In view of the variety of factors and the amount of information
considered, the former members of the Special Committee did not find it
practicable to and did not make specific assessments of, quantify or otherwise
assign relative weights to the specific factors considered in reaching its
determination. The determination was made after consideration of all of the
factors as a whole.
<TABLE>
<CAPTION>
<S> <C> <C>
/s/ Thomas H. Adams /s/ Frank E. Samuel, Jr. /s/ Iain C. Wylie
- ---------------------------------------------- --------------------------------- ---------------------------------
Thomas H. Adams, Ph. D., Chairman Frank E. Samuel, Jr. Iain C. Wylie
</TABLE>
8
<PAGE>
EXHIBIT 99
LIFE TECHNOLOGIES ANNOUNCES DIRECTOR RESIGNATIONS
ROCKVILLE, Md., Nov. 5--Life Technologies, Inc. (Nasdaq: LTEK) announced today
that Frank E. Samuel, Jr. and Iain C. Wylie have resigned as members of the
Company's board of directors, effective November 3, 1998. In statements to the
Company's board of directors submitted in connection with their resignations,
Messrs. Samuel and Wylie indicated that they believe they are unable to fulfill
their obligation to the Company's public stockholders in light of the
disbandment of the special committee of independent directors, which was formed
to evaluate a proposal by Dexter Corporation to purchase all shares of the
Company not owned by it for a price of $37 per share in cash. Messrs. Samuel
and Wylie, who were two of the three members of the special committee, also
noted their views of Dexter's actions in connection with its proposal as a
reason for their resignations. The statements of Messrs. Samuel and Wylie also
indicate why the special committee, prior to disbandment, did not recommend that
the Company's public stockholders accept Dexter's July 7, 1998 proposal. The
statements of Messrs. Samuel and Wylie will be filed as exhibits to a Current
Report on Form 8-K to be filed by the Company with the Securities and Exchange
Commission in the time prescribed by law.
Life Technologies develops, manufactures and supplies more than 3,000 products
used principally in life science research and commercial manufacture of
genetically engineered products. The Company is a leading supplier of sera and
other cell growth media, as well as enzymes and other biological products
necessary for recombinant DNA procedures.
