Will drop $6.8bn offer for gene sequencing specialist after shareholder opposition
Roche has decided to call off its $6.8bn hostile takeover of Illumina after shareholders in the gene sequencing specialist blocked attempts to elect new directors onto the board who were in favour of the deal.
Instead, Illumina re-elected the current crop of directors at the April 18 annual general meeting, and Roche announced immediately afterwards that it would allow its current $51 per share bid for the company to lapse when it reaches the April 20 deadline.
The Swiss pharma company's CEO Severin Schwann said in a statement that "with access only to public information about Illumina's business and prospects, we do not believe that a price above Roche's offer … would be in the interest of Roche's shareholders".
Many analysts thought that Roche would come forward with another bid, following the same pattern it adopted when purchasing Genentech and Ventana Medical Systems.
In the last couple of weeks the exchanges between the two companies have become increasingly rancorous, however, raising questions about the chances of concluding a deal even if Roche had been able to entice Illumina's management to the negotiating table.
Roche has suggested that rival, and lower-cost, technology platforms from the likes of Life Technologies and Oxford Nanopore Technologies may topple Illumina's leading position in the gene sequencing sector. Last month, the drugmaker's chairman Franz Humer said that other options were available if the bid for Illumina failed.
Meanwhile, Illumina's CEO Jay Flatley welcomed Roche's announcement, saying: "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."
Flatley said earlier this month that the company was expanding its gene-sequencing platforms into new areas such as molecular diagnostics, which could double the potential market it addresses from $4bn to $8bn.
A memo sent by Illumina's CEO to the company's employees suggests that Roche's director nominees only garnered support from shareholders with a total stake in the firm of around 6 per cent.