NEW YORK (GenomeWeb News) — Illumina today sent a third letter to shareholders urging them to turn away Roche's hostile bid for the company. At the same time, Roche expressed disappointment in Illumina's rebuff of its increased offer last week.
Illumina's annual shareholder meeting is scheduled for April 18, during which stockholders will elect four board members and vote on a proposal by Roche to expand the board by two members. Roche has named its own candidates for all open board positions.
In a letter to Illumina's shareholders, company President and CEO Jay Flatley and Chairman William Rastetter ask shareholder to reject Roche's board nominees as well as the Swiss pharmaceutical and diagnostics firm's strategy to increase the San Diego firm's board in order to force through its bid for Illumina.
"Do not let Roche's hand-picked nominees get elected to your Board to support Roche's hostile bid to buy Illumina at a low-ball price," the letter said.
Roche launched its bid originally in late January with a $44.50 per-share offer for a total of $5.7 billion, which Illumina's board unanimously rejected. Roche responded last week by upping the offer to $51 per share, or a total of $6.7 billion.
Illumina turned down that offer as well, and yesterday Flatley told Roche Chairman Franz Humer in a letter, "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."
In a statement today Roche CEO Severin Schwan said the company is "disappointed that Illumina's board of directors has rejected Roche's increased $51 cash offer and continues to rebuff our attempts to engage in substantive discussions," and called the revised bid "highly attractive."
"By not engaging with Roche, Illumina reinforces the notion that its Board and management are determined to preserve their positions rather than maximize shareholder value," Schwan said. "We expect that Illumina shareholders will see the substantial value in our increased offer, conclude that there is absolutely no justification for Illumina's current directors' refusal to begin discussions with Roche and vote their shares for the Roche director nominees."
However, Flatley and Rastetter today called Roche's revised offer "nothing more than the next step in its aggressive campaign to opportunistically acquire Illumina at the lowest possible price."
Illumina previously sent two letters to shareholders last month urging them to reject Roche's bid.
In mid-morning trading on the Nasdaq, shares of Illumina were up a fraction of 1 percent to $51.42.