Illumina Inc.’s board unanimously rejected Roche Holding AG’s $5.7 billion hostile takeover bid for the maker of gene-mapping tools as “grossly inadequate.”
“The timing of the offer is blatantly opportunistic and does not reflect Illumina’s strong platform of new products and pipeline,” Chairman William Rastetter and Chief Executive Officer Jay Flatley said today in a letter to shareholders.
Roche went directly to shareholders of San Diego-based Illumina after the company rebuffed its approaches. Owners have until midnight New York time on Feb. 24 to tender their shares at $44.50 each, Basel, Switzerland-based Roche said last month. Illumina closed today at $51.80 and investors have signaled they expect Roche to raise its bid.
Roche, the world’s biggest maker of cancer drugs, said it wants to move Illumina’s gene-sequencing technology from academic research labs into routine medical use. The acquisition would build Roche’s palette of health diagnostics products and potentially allow the company to better target its medicines toward individual patients. Illumina said Jan. 10 that by the end of the year it would market a machine capable of scanning a person’s complete DNA in a day.
Silvia Dobry, a spokeswoman for Roche, didn’t immediately return a call seeking comment on Illumina’s action.
Illumina has bolstered its takeover defenses since Roche made its $44.50-a-share acquisition offer last month, granting investors the right to buy shares at half price, a so-called poison-pill maneuver. The strategy may block an unwanted bid by making it prohibitively expensive.
Illumina said Roche’s bid fails to recognize the growth potential from Illumina’s 60 percent share of the next-generation genetic sequencing market.
“Your proposal fails to compensate our stockholders for the intrinsic and scarcity value associated with Illumina’s unmatched leadership position,” Rastetter and Flatley wrote in a letter to Franz Humer, board chairman of Roche.