Roche Holding AG (ROG) said it’s disappointed that Illumina Inc. (ILMN:US)’s board rejected its increased offer for the maker of gene-mapping tools and said there’s “no justification” for the company’s refusal to negotiate a deal.
The board of San Diego-based Illumina “continues to rebuff our attempts to engage in substantive discussions,” Roche Chief Executive Officer Severin Schwan said today in a statement. “Roche’s increased offer is 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.”
Illumina today urged shareholders to reject Roche’s slate of board members, which mean to allow Roche to buy Illumina “at a low-ball price.” Basel, Switzerland-based Roche raised its offer last week by 15 percent to about $6.7 billion, or $51 a share, after Illumina rejected the company’s original bid. That offer is “grossly inadequate,” Illumina said again today. Investors have until 6 p.m. New York time April 20 to tender their stock for the new cash offer, Roche said on March 29.
The increased offer “does not adequately reflect Illumina’s singular position in an industry poised for extraordinary growth,” Illumina Chief Executive Officer Jay Flatley said in a letter to Roche Chairman Franz Humer. “We are advising our stockholders that your revised offer is not in their best interests and not to tender any shares,” Flatley said in the letter, which was distributed in a statement yesterday.
Illumina shareholders will decide April 18 whether to replace board members with Roche nominees, which would clear the way for talks from both sides. Illumina urged investors to support the company’s directors.
Illumina rose less than 1 percent to $51.40 at 9:42 a.m. New York time.
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