Roche vs Illumina – Round 1


On Tuesday, Roche announced a $5.7 Billion hostile takeover bid for Illumina. Roche said it is making its proposal after “multiple efforts to engage with Illumina in order to reach a negotiated transaction,” were rebuffed. Under the terms of its all-cash proposed deal, Roche would acquire all outstanding shares of the San Diego-based next-generation sequencing and microarray firm at $44.50 per share. The bid price is a 61 percent premium over the one-month historical average of Illumina’s share price and 43 percent premium over the firm’s three-month historical average, both as of Dec. 21. (See the Roche Press Release…)

Today,  in response to Roche’s bid for the company, Illumina has created a rights agreement to “deter coercive and otherwise unfair takeover tactics”. The agreement states that if any person or group, such as Roche, becomes the holder of 15 percent or more of Illumina’s stock, then shareholders — excluding those owning 15 percent or more of the stock — would have the right to purchase additional shares at the then-current exercise price (a favorable price), but that the shares would have a market value of twice that exercise price. In other words, the shareholder would be able to buy a share of Illumina at half the market price. (See the Illumina Press Release… )

If completed, the acquisition would combine two of the leading names in next-gen sequencing.