January 21, 2009 / 3:01 PM / 10 years ago

UPDATE 1-Nanogen says merger with Elitech unlikely to close

Jan 21 (Reuters) - Nanogen Inc NGEN.O said it was unlikely that it will get stockholder approval or working capital financing to complete its proposed merger with Elitech Group before the deadline, sending its shares down 15 percent.

The diagnostics products maker said it had obtained permission from Elitech to explore other alternatives as both firms believe closing conditions to the deal will not be met by March 31, failing which each of the companies has the right to terminate the merger agreement.

The company said it would look at alternatives that included changes to the deal with Elitech, signed in August last year, sale of assets and capital infusion.

Nanogen said under the terms of convertible notes issued by it in 2007 and 2008, its failure to commence solicitation of stockholder approval by Feb. 1, will reinstate its obligations to make certain interest and redemption payments, which are currently deferred.

Nanogen shares were trading down 3 cents at 17 cents early Wednesday morning on Nasdaq. (Reporting by Vidya L Nathan in Bangalore; Editing by Amitha Rajan)

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