Roche Lifts Bid for Illumina as Hostile Takeover Heats Up

Swiss-based Roche lifted its hostile bid to acquire smaller rival Illumina (NASDAQ:ILMN) by $6.50 a share on Thursday, marking the latest in what has become a lengthy takeover saga.

The pharmaceutical giant is now offering $51 a share, compared with $44.50, which was called “grossly inadequate” and rejected by Illumina’s board in February.

In a letter to Illumina CEO Jay Flatley, Roche chairman Franz Humer that the revised offer represents a 15% premium to the company’s offer on Jan. 25 and an 88% premium over its closing stock price on Dec. 21, the day before reports of a proposed deal were first made public.

Shares of Illumina were up nearly 4% to $51.71 Thursday morning.

“Based on our discussions with Illumina shareholders we have seen interest to accelerate the takeover process,” Roche CEO Severin Schwan said in a statement.

Illumina, a gene sequencing company, told shareholders on Thursday to take no action related to the offer. Its board will “thoroughly review” the proposal and make a recommendation to stockholders in due course.

If San Diego-based Illumina fails to enter negotiations, Roche said it will “have no choice” but to continue its effort to buy the company through unilateral measures. Roche said last month that it would nominate independent candidates for election to Illumina’s board to gain majority control, which would make it much easier to push a transaction.

The Illumina board has unanimously rejected Roche’s previous offers and in January adopted a “poison pill” defense strategy to “protect stockholders from coercive or otherwise unfair takeover tactics.”

Schwan said it hopes Illumina agrees to commence discussions, or at least remove those obstacles so that shareholders can make their own decision.