Feb. 12 (Bloomberg) -- Illumina Inc. and nine of its board members were sued in New York over the gene-sequencing equipment maker’s rejection of a $6.7 billion buyout bid from Roche Holding AG.
Vista Capital Management SA, a Geneva-based money manager that holds more than 300,000 shares in San Diego-based Illumina, is seeking more than $10 million in damages and a court order to prevent Illumina from using a so-called poison pill designed to dilute Basel, Switzerland-based Roche’s stake in the company, according to a copy of the complaint filed yesterday in federal court in Manhattan.
Vista accused Illumina and the directors of breach of fiduciary duty over their “self-interested refusal to enter into meaningful discussions or negotiations in response to multiple offers to acquire the company made by Roche,” according to the complaint.
Illumina rejected Roche’s $44.50-a-share hostile bid in January 2012 as well as a sweetened, $51-a-share proposal in March that valued the company at $6.7 billion. Roche Chairman Franz Humer said last month that the deal was “definitively off the table” and that Illumina’s price demands were “excessive,” sending Illumina’s shares down the most in 15 months.
A Swiss newspaper, L’Agefi, reported in December that the companies had agreed to a $66-a-share deal. Illumina asked for $68 a share on Dec. 28 and $75 a share on Jan. 3, L’Agefi reported on its Twitter feed on Jan. 7, without saying where it got the information.
The shares gained 2 cents to $50.27 at the close of trading New York, giving the company a market value of $6.2 billion. The stock has dropped 11 percent since reaching a 16-month high on Dec. 21.
An offer of more than $65 a share would have been in the interest of shareholders and Illumina’s board should have disclosed it if it was made, Lucien Selce, Vista’s chairman, wrote in a letter to Illumina Chairman William H. Rastetter last month. He asked the company to respond publicly to the question of whether it received an informal offer. Rastetter didn’t respond, Selce said in an e-mail.
“Illumina’s policy is not to comment on pending legal matters,” Jennifer Temple, a spokeswoman for the company, said in an e-mail.
Illumina Chief Executive Officer Jay Flatley said in September that Roche, by making its bid public, stopped the gene-sequencing company’s board from discussing what price would be acceptable. Directors didn’t want to openly talk about a sale amount after Roche’s hostile bid was made public in January because they would have needed to disclose those discussions, he said.
The case is Vista Capital Management SA v. Illumina Inc., 13-cv-955, U.S. District Court, Southern District of New York (Manhattan).
To contact the reporter on this story: Simeon Bennett in Geneva at email@example.com
To contact the editor responsible for this story: Phil Serafino at firstname.lastname@example.org