NEW YORK (GenomeWeb News) – Shareholders have filed a class action lawsuit against Illumina alleging a conflict of interest and a breach of fiduciary responsibilities in connection to Roche's $5.7 billion hostile bid for the San Diego firm.
In a lawsuit filed in the Delaware Court of Chancery, plaintiffs alleged that by refusing to engage in negotiations with Roche before and after Roche made its hostile bid, Illumina had failed to act in the best interest of its shareholders.
In December, officials at Roche had told Illumina of its interest in buying the company, but Illumina rejected Roche's offer of $40 for each share of Illumina's stock. In late January, Roche launched its hostile bid which would pay $44.50 for each share of Illumina's stock.
Illumina responded by creating a so-called poison pill plan to ward off Roche.
"Plaintiffs claim that defendants failed to act in the best interest of shareholders and failed to maximize the value shareholders would receive by depriving the Illumina … public stockholders of the opportunity to realize fully the benefits of their investment," Gilman Law, which is representing the plaintiffs, said in a statement.
Illumina has hired investment bank Goldman Sachs as an advisor as it tries to fend off Roche. The lawsuit alleges a conflict of interest saying that by advising Illumina to reject Roche's earlier $40 per share bid for Illumina, Goldman Sachs financially benefitted.
Illumina officials declined to comment on the lawsuit.