Roche Pounces On Market-Weakened Illumina

When Illumina Inc. chairman William Rastetter, PhD, got a call from Arthur Levinson, PhD, a Roche director, in November, it was ostensibly to discuss a Roche equity investment in Illumina and ways the companies could work together in the area of genetic sequencing. But according to SEC filings, when Rastetter and Illumina president & CEO Jay Flatley met Levinson and Roche chairman Franz Humer face to face a month later, they discovered Roche instead wanted to buy their company outright. Three weeks later, Roche made a $40 per share proposal, which it subsequently increased to $44.50 per share, or approximately $5.7 billion. Illumina rejected the bid and Roche has initiated a hostile tender offer for Illumina’s shares. [See Deal] But unlike some prior multi-billion-dollar takeovers where Roche haggled over price for more than half a year, in this case, it may be wise for it to seal the deal more quickly.