Illumina Drops Below $51 Offer on Concern Roche Will Walk

Illumina Inc. (ILMN), which has twice rejected unsolicited takeover bids from Roche Holding AG (ROG), fell below the $51-a-share current offer as investors grew concerned that the Swiss drugmaker would abandon the deal.

Illumina dropped 5.8 percent to $49.51 at 4 p.m. New York time in the biggest decline for the San Diego-based company since October. Roche raised its offer on March 29 to $51 a share, or about $6.7 billion, from $44.50 in January. It was the first time the shares dipped below the bid price.

The current offer is “more than adequate to serve as a basis” to start talks and “is full, fair and extremely attractive by every conceivable financial metric,” Roche, based in Basel, Switzerland, said today in a statement. The drugmaker won’t raise the bid without starting talks with Illumina, Roche Chief Executive Officer Severin Schwan told analysts and investors on a conference call.

“There is no reason for us, whatsoever, to increase our offer unless we get into negotiations,” Schwan said. “And so far, this is not the case.”

Illumina’s gene-mapping technology may help Roche, the world’s biggest maker of cancer drugs, tailor medicines to individual patients. A spokesman for Illumina declined to comment today.

“The concern is the possibility that Roche may just say, ‘We don’t want to deal with this anymore,’” said Les Funtleyder, a fund manager who helps oversee $100 million, including Illumina shares, at Miller Tabak & Co. “That Roche might actually be serious about walking away.”

To contact the reporter on this story: Meg Tirrell in New York at mtirrell@bloomberg.net

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net

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The headquarters of Illumina

Illumina Inc. via Bloomberg

The headquarters of Illumina, in San Diego.

The headquarters of Illumina, in San Diego. Source: Illumina Inc. via Bloomberg