Illumina Rejects Roche Offer

(For Illumina’s quarterly results, see page 12.)
Analysts expect Roche to raise its offer for Illumina and to court Illumina’s shareholders. According to NASDAQ.com, Illumina’s largest shareholders, as of December 31, 2011, were Baillie Gifford & Co. (10%), Capital Research Global Investors (10%), Sands Management (8%), Morgan Stanley Investment Management (7%) and Jennison Association (5%). On February 15, Illumina closed at $54.58 per share, which is 22.7% higher than Roche’s bid price.

San Diego, CA 2/7/12; Basel, Germany 2/8/12—Illumina’s Board of Directors has voted to reject Roche’s unsolicited $44.50 per share cash offer for the company (see IBO 1/31/12). “It is the Board’s unanimous belief that Roche’s offer dramatically undervalues Illumina and fails to reflect the value of the Company’s unique leadership position and future growth prospects,” stated Illumina President and CEO Jay Flatley. Illumina cited seven main reasons for its recommendation to stockholders to reject the offer: the offer is inadequate and undervalues the company’s industry-leading position and growth opportunities; the offer’s timing is opportunistic and does not reflect Illumina’s platform of new products and pipeline; the offer fails to capture Illumina’s value as an enabler of personalized health care; Roche’s tactics seek to disadvantage Illumina shareholders; the offer is below recent trading levels; the offer’s conditions create significant uncertainty and risk; and the inadequacy opinions of Illumina’s financial advisors. Roche responded that it was disappointed with the actions of Illumina’s Board. “We have reviewed Illumina’s 14D-9 [SEC] filing, and we continue to believe that our offer is full and fair and provides a unique opportunity for Illumina’s shareholders,” commented Roche CEO Severin Schwan. “As we have previously stated, it remains our preference to enter into a negotiated transaction with Illumina, and we stand ready to commence discussions at any time.”

< | >