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.

Roche’s interest is strategic, but also opportunistic. Like other providers of gene sequencing instrumentation, the global economic slowdown and cutbacks...