Roche launches $5.7 billion hostile bid for Illumina
pharmafile | January 25, 2012 | News story | Research and Development, Sales and Marketing | Diagnostics, Illumina, Roche
Roche has launched a hostile takeover bid for US diagnostics company Illumina.
The Swiss manufacturer appears tired of waiting for an accord with the firm, saying in a statement that it has “made multiple efforts to engage with Illumina in order to reach a negotiated transaction”.
Roche proposes to buy all of the outstanding shares of common stock at $44.50 per share in cash, worth a total of $5.7 billion.
It will also put up candidates for election to Illumina’s board in a bid to make Roche-nominated directors a majority presence there.
“Illumina has been unwilling to participate in substantive discussions,” the company suggests, adding that its offer would give a ‘substantial premium’ to shareholders.
The $44.50 figure represents a 64% rise on Illumina’s share price from a month ago.
“We expect that Illumina’s shareholders will welcome the opportunity to sell their shares at a significant premium to current market prices,” said Roche group chief executive Severin Schwan.
But San Diego-based Illumina says its board of directors “will thoroughly review Roche’s proposal and make a recommendation to stockholders in due course”.
Illumina makes tools and systems to analyse genetic variation and gene sequencing, an area in which Roche is keen to cement its place.
Roche would uses Illumina’s DNA sequencing technology to help meet demand for genetic and genomic solutions in various therapy areas.
DNA sequencing is expected to help discover complex biomarkers that could become companion diagnostics paired with specific treatments.
Roche has grand plans for the deal, intending to combine its own applied science business with that of Illumina and making San Diego the new HQ for the unit, while keeping its existing applied science operations in Penzberg, Germany.
Roche says the companies’ combined resources will help accelerate sequencing into clinical and routine diagnostics, and it is leaving the door open for negotiation with the US firm.
“It is our strong preference to enter into a negotiated transaction with Illumina,” insists Schwan. “We remain willing to engage in a constructive dialogue with Illumina to jointly develop an optimal strategy for maximising the value of our combined business.”
Adam Hill
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