New York, NY 8/18/16; Los Angeles, CA 8/18/16—Quoting a report on StreetInsider.com from an anonymous source, Bloomberg wrote earlier this month that Illumina received an acquisition offer from Thermo Fisher Scientific valued at $30 billion in stock. However, interviewed by Investors Business Daily, analysts Doug Schenkel of Cowen and Wells Fargo’s Tim Evans told the paper that the offer made no sense due to pricing and regulatory issues.
The report was greeted with skepticism by financial analysts and industry observers, and no further news has emerged. As Barron’s noted, the offer is equal to around $200 per share for Illumina, but Illumina stock closed at $169.15 per share on August 17, suggesting a relatively small premium. Thermo is currently working to complete its acquisition of FEI for $4.2 billion (see IBO 5/31/16). As of July 2, Thermo’s total debt was $14.2 billion, with 3.2x total debt to adjusted EBITDA. Mr. Evans also suggested the deal would be overly dilutive to Thermo’s EPS due to the equity required to complete the purchase. The deal would also be expected to encounter regulatory hurdles as the two companies are the dominant suppliers of NGS systems as well as microarrays.