ILLUMINA’S BOARD has unanimously rejected Roche Holding’s $5.7 billion bid to take over the maker of gene-mapping tools as “grossly inadequate”.
“The timing of the offer is blatantly opportunistic and does not reflect Illumina’s strong platform of new products and pipeline,” chairman William Rastetter and chief executive Jay Flatley said to shareholders yesterday.
Roche went directly to shareholders of San Diego-based Illumina in a hostile bid after the company rebuffed its approaches.
Owners have until midnight New York time on February 24th to tender their shares at $44.50 each, Basel, Switzerland-based Roche said last month.
Illumina has traded above the offer price since January 25th, signalling investors expect Roche to raise its bid.
Roche, the world’s biggest maker of cancer drugs, said it wants to move Illumina’s gene-sequencing technology from academic research labs into routine medical use.
The acquisition would build Roche’s palette of health diagnostics products and potentially allow the company to better target its medicines toward individual patients. Illumina said last month that, by the end of the year, it would market a machine capable of scanning a person’s complete DNA in a day.
Illumina has bolstered its takeover defences since Roche made its $44.50-a-share acquisition offer last month, granting investors the right to buy shares at half price, a so-called poison-pill manoeuvre.
The strategy may block an unwanted bid by making it prohibitively expensive. The company also outlined a “golden parachute” compensation plan for its executives if they lose their jobs within two years of an acquisition, according to a regulatory filing.
Mr Flatley would be paid double his annual salary plus a bonus, stock and other benefits valued as of January 27th at $10.7 million. Five other executives would receive benefits valued from $2.6 million to $3.2 million, according to the filing.
In its response yesterday, Illumina said Roche’s bid fails to recognise the growth potential from the company’s 60 per cent share of the next-generation genetic sequencing market. – (Bloomberg)
