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Roche Decides Not To Extend Tender Offer For Illumina

Swiss drugmaker Roche Holding AG (RHHBY.PK) said Wednesday that it has decided not to extend its $51.00 per share cash tender offer for U.S.-based genetic diagnostics company Illumina Inc. (ILMN: Quote), in view of the apparent re-election of the incumbent directors of Illumina.

Accordingly, Roche's offer will expire on April 20, 2012. Shares of Illumina are down more than 3.5 percent following the news.

Illumina shareholders were to decide at Wednesday's annual meeting whether to replace its four directors with Roche nominees. The move was expected to clear the way for talks from both sides.

Severin Schwan, CEO of Roche said in a statement, "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 added that Roche had desired to engage in a constructive dialogue with Illumina's management on a potential deal, bu the absence of such talks led to its decision to not extend its offer.

Meanwhile, Illumina in a separate press release, announced preliminary voting results from its annual meeting of stockholders held earlier today.

The company said that based on the advice of its proxy solicitor, results indicated that its stockholders have elected all four of the company's nominees to the board of directors - Blaine Bowman; Karin Eastham; Jay Flatley, President and CEO; and William Rastetter, Chairman. CEO Flatley said in a statement, "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..."

Illumina also said that its stockholders have rejected all the Roche proposals that were submitted by the company to be voted on at the annual meeting. These include the proposed amendment of Illumina's bylaws to increase the size of the board of directors, a proposal to expand Illumina's board, and a proposed amendment of Illumina's bylaws to require that newly created directorships be filled only by a stockholder vote.

In late January, Roche commenced a tender offer to acquire all the outstanding shares of Illumina for $44.50 per share in cash. The company increased its offer in March to $51.00 per share in cash for an aggregate value of about $6.8 billion.

The sweetened offer represented an 88 percent premium over Illumina's closing stock price on December 21, 2011 - the day before market rumors about a potential transaction between Roche and Illumina.

The proposed deal was expected to strengthen Roche's position in the Life Science market in sequencing and microarrays to address the growing demand for genetic/genomic solutions.

The deal would also have enabled Roche to use Illumina's scale, global distribution and diagnostic test development expertise to develop new diagnostic tests that serve patients and customers even more effectively.

In Wednesday's session, RHHBY.PK is trading at $44.55, up $0.49 or 1.11 percent on 86,078 shares.

ILMN is trading at $42.35, down $1.65 or 3.75 percent on 14.77 million shares.

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by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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