Roche Raises Illumina Takeover Bid to $51/Share

3/29/12Follow @xconomy

Roche has raised the stakes in its ongoing hostile takeover bid for San Diego-based Illumina (NASDAQ: ILMN)

The Switzerland-based healthcare giant said it has raised its offer to $51 a share for Illumina, a 15 percent premium over its original offer in January of $44.50 a share. The new bid values Illumina, the market leader in DNA sequencing instruments, at about $6.7 billion. Shortly after Roche issued its statement, and released a letter in which chairman Franz Humer sought to open negotiations, Illumina responded with its own statement, asking shareholders to sit tight until its board can review the new offer.

Shareholders quickly bid up Illumina stock some more, essentially wagering that Illumina will end up being sold for even more. Shares of Illumina climbed $2.28 to $52.16 at 10:37 am Eastern time.

In the recent past, Roche has raised its offers to shareholders before ultimately acquiring Tucson, AZ-based Ventana Medical Systems in 2008 and South San Francisco-based Genentech in 2009.

“We view the raising of the bid as a sign that underscores Roche’s commitment to successfully acquiring ILMN,” said Quintin Lai, an analyst with Robert W. Baird, in a note to clients today. “Additionally, as we noted when news of this hostile bid first surfaced in late-January, Roche has a history of increasing its offers for hostile targets over a longer M&A process, and today’s news is consistent with that behavior.”

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