Roche abandons Illumina takeover bid
pharmafile | April 19, 2012 | News story | Sales and Marketing | Diagnostics, Illumina, Roche, mergers and acquisitions
Roche has conceded defeat in its bid to buy Illumina, after shareholders of the diagnostics firm blocked the takeover – at least for the meantime.
Shareholders voted to re-elect the incumbent directors of Illumina at its annual meeting, thereby snubbing Roche’s candidates for the posts, who would have opened the door to the takeover.
The decision is a major blow to Roche, which had repeatedly raised its offerings culminating in a $6.7 billion for the firm. The Swiss pharma company said it would consider raising its bid further if it were allowed to conduct due diligence and value Illumina’s business with more information, but this offer was also rebuffed.
Roche’s offer will expire at the close of business tomorrow and it looks unlikely to pique the interest of shareholders.
Severin Schwan, chief executive of Roche said: “We continue to hold Illumina and its management in very high regard but, with access only to public information about Illumina’s business and prospects, we do not believe that a price above Roche’s offer for Illumina of $51.00 per share would be in the interest of Roche’s shareholders.”
Schwan said Roche wanted ‘constructive dialogue’ with Illumina, but in the absence of such discussions, would not raise its bid any further. He concluded that Roche would continue to look at other possible acquisitions and ‘options and opportunities’ to expand its diagnostics business.
It is rare for such bids to be successfully blocked by the takeover targets and their shareholders. Roche had looked set to add Illumina to its roster of major acquisitions, including its takeover of another diagnostics firm, Ventana in 2007 for $3.4 billion and the buy-out of Genentech in 2009 for $46.8 billion.
Analysts say Roche will keep an eye on Illumina’s performance – if it fails to match shareholder expectations, it could pounce again within the next year or two.
Illumina’s chief executive hailed the decision as a victory, and will now have to deliver on the company’s growth prospects.
Jay Flatley, president and chief executive of Illumina said: “We thank Illumina stockholders for their support and appreciate their confidence in our ability to execute our strategic plan and create compelling value. Our Board will continue to protect and hold paramount the interests of our stockholders as we continue to cultivate Illumina’s leadership position in a rapidly innovating and growing industry,” he said.
Flatley added: “We are pleased that Roche has decided not to extend its inadequate offer to acquire Illumina and that we can now return our full focus to growing our business, making the most of the expanding opportunities in our space, and delivering superior results for our customers and stockholders.”
Andrew McConaghie
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