NEW YORK (GenomeWeb News) – Illumina has scheduled its annual shareholders meeting for April 18, during which the fate of Roche's $5.7 billion hostile bid for Illumina could be determined.
During the meeting, to be held in New York, shareholders will vote to fill four seats on Illumina's board and vote on a proposal by Roche to expand Illumina's board. At stake is Roche's $44.50 per-share bid to acquire Illumina, which Illumina's board has unanimously rejected.
Roche hopes to fill a total of six seats on Illumina's board, including four that are up for reelection that are currently held by Jay Flatley, the company's President and CEO, Chairman William Rastetter, Blaine Bowman, and Karin Eastham.
In addition, Roche is asking shareholders to repeal certain Illumina bylaws in order to expand Illumina's board size by two to a total of 11, as part of its strategy to acquire the firm. Should shareholders agree to that proposal, Roche hopes to fill the additional seats with its nominees.
If Roche is successful in replacing the four board members up for reelection and getting its two additional nominees voted to Illumina's board, the board would be made up of a majority of Roche-nominated board members.
Roche has nominated six candidates for Illumina's board: Barry Bailey; Earl Collier; Dwight Crane; David Dodd; Michael Griffith; and Jay Hunt.
Illumina is urging its shareholders to reelect its four board members and to reject Roche's plan to expand the board. In its definitive proxy statement issued today, Illumina said that Roche's nominees would have a conflict of interest if elected to Illumina's board and notes that each of the nominees is paid $60,000 by Roche in cash compensation and out-of-pocket expenses in order to agree to be a nominee.
"We believe Roche's nominees have been nominated solely to facilitate Roche's acquisition of Illumina at a price that is inadequate to Illumina's stockholders," Illumina said in a letter to shareholders today. "While Roche's nominees may not be controlled by Roche or obligated to vote as directed by Roche, we believe their objectivity with respect to Roche's unsolicited offer may be colored by their relationship with Roche, including the compensation and indemnification agreements referenced above."
It added that Roche's plan to repeal Illumina's bylaws that were adopted after April 22, 2010, "could have the effect of repealing one or more properly adopted bylaw amendments that Illumina's board of directors determines to be in the best interests of Illumina and its stockholders and adopted in furtherance of its fiduciary duties."
"[W]e believe Roche's proposal to repeal bylaw amendments represents Roche's attempt to interfere with our Board of Directors' ability to act in accordance with its fiduciary duties to you and therefore should be rejected," the San Diego company said.
If Roche cannot get its six nominees voted on Illumina's board, it may have to abandon its current bid or increase its offer.
Roche Chairman Franz Humer said recently at the firm's annual general meeting that if the Swiss pharmaceutical and diagnostic firm's bid for Illumina fails, it has "other options."
He did not detail what those options may be but said, "Illumina is not the only gene sequencing company, and there are other companies making quantum leaps in this field. Roche is also working on gene sequencing technologies of its own."