NEW YORK (GenomeWeb News) – Illumina has once again rejected Roche's offer to acquire the firm and is urging its shareholders to also reject Roche's slate of nominees for Illumina's board of directors.
Last week, Roche upped its hostile takeover bid from $44.50 to $51 per share — an increase of 15 percent — now valuing the proposed deal at nearly $6.6 billion.
In a letter made public by Roche last week, its Chairman, Franz Humer, urged Illumina CEO Jay Flatley to enter into negotiations with Roche. "We hope that you will agree that our new price presents a very attractive opportunity to your shareholders and that the interests of your shareholders and fiduciary responsibilities of you and your Board require that you agree to enter into discussions with us," he wrote.
But today, Flatley responded to Humer, telling him that Illumina's board has unanimously determined that Roche's latest bid "dramatically undervalues Illumina and does not adequately reflect Illumina's singular position in an industry poised for extraordinary growth."
He added, "Our Board remains of the opinion that Roche has made an opportunistic offer, fully aware that even the revised offer does not reflect the intrinsic strength or future prospects of Illumina. We are committed to acting in the best interests of all our stockholders and believe that Illumina s strategic plan, executed independently, will create stockholder value significantly greater than what you have proposed."
Illumina is holding its annual shareholders meeting on April 18. At that time, its stockholders will have the opportunity to elect four board members and vote on a proposal by Roche to expand the board by two members. Roche hopes to fill all open board positions with its own candidates.
Illumina today recommended that its shareholders vote in favor of its directors, which include Flatley, Chairman William Rastetter, Blaine Bowman, and Karin Eastham, rather than Roche's nominees. It also advised its shareholders to vote against Roche's additional proposals.
Several analysts have said that they expect Roche will need to increase its offer to at least the mid- to upper $50s range to get a deal done.
Illumina's announcement rejecting the latest offer comes hours after it pre-released its first-quarter revenues. The firm said this morning that it will report Q1 revenues of $270 million, beating Wall Street's consensus estimate, though 4 percent below its revenues for Q1 2011.