Illumina will remain an independent company, at least for now.
The San Diego-based company (NASDAQ: ILMN), the market leading maker of DNA sequencing instruments, fended off a hostile takeover bid by Roche as its shareholders re-elected the four members of the Illumina board who were opposed by Roche nominees. Roche said in a statement that it will now let its $51 a share takeover bid expire at 6 pm Eastern time on Friday.
“We are pleased that Roche has decided not to extend its inadequate offer to acquire Illumina and that we can now return our full focus to growing our business, making the most of the expanding opportunities in our space, and delivering superior results for our customers and stockholders,” Illumina CEO Jay Flatley said in a statement.
Illumina convened the shareholder meeting at 9 a.m. in New York. Most of the votes had been cast electronically, and the meeting was over in less than an hour.
The shareholder vote marks the end of a tussle that became public in January, when Roche said it was bidding $44.50 a share, or about $5.7 billion, to take over Illumina. The Switzerland-based healthcare giant argued that it had the horsepower to help Illumina turn its scientific instruments into more widely used diagnostic tools, as improved speed and cost of DNA sequencing is opening up new opportunities in personalized medicine. Illumina countered that the offer was too low, that Roche was essentially looking to snap up Illumina at a vulnerable time when its stock price was depressed because concerns about government budget cuts made its customers cautious about buying new genomics machines. Roche sweetened its offer once to $51 a share, but as the market outlook has improved somewhat in 2012, Illumina has argued it was better off pursuing the fast-growing market on its own.
Illumina stock has traded over $51 in recent weeks on speculation that Illumina would be sold to Roche or somebody else, at an even higher price. But the stock has been deflating for several days now as it appeared Illumina would fend off the hostile bid. Shares of Illumina dropped 5 percent today to $41.83 at 10:26 am Eastern.
Quintin Lai, an analyst with Robert W. Baird, said that despite the stock drop, he is still “long-term positive” about Illumina’s prospects on its own.
“We believe ILMN’s management team and re-elected board are confident in delivering outperformance relative to its guidance and in returning to long-term growth, which is reflected in its reluctance to enter negotiations with Roche,” Lai said in a note to clients today. “Our interpretation of Roche’s comment this morning suggests they remain very interested in acquiring ILMN but are frustrated.”
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