Roche Holding AG began its $5.7 billion hostile takeover offer for Illumina Inc., even as investors signaled they expect the Swiss drugmaker to raise its bid for the gene-mapping company.
Roche began the tender offer, Illumina said in a statement today. Shareholders should take no action while the board reviews the proposal, the company said. Illumina will postpone announcing fourth-quarter earnings until it completes the review and makes a recommendation to stockholders, which will occur within 10 business days, the company said. The earnings announcement had been scheduled for Jan. 31.
Roche said Jan. 25 that it planned to make the $44.50-a- share offer because Illumina had rebuffed its approaches. Illumina is adopting a “poison-pill” defense to block the takeover. Roche also wants to nominate six members of the Illumina board at the U.S. company’s annual meeting.
Illumina’s stock has traded above the offer price since the announcement amid speculation of a higher bid. The stock fell 0.5 percent to $52.39 on the Nasdaq Stock Market at 10:30 a.m. in New York.
Daniel Grotzky, a spokesman for Roche spokesman, declined to comment today on Illumina’s statement. Roche said in a statement yesterday it was “disappointed that the Illumina board of directors has been unwilling to participate in substantive discussions,” adding that it was confident shareholders will see the offer’s value.
The Swiss maker of cancer drugs wants to bring Illumina’s gene-sequencing technology out of academic labs and into routine medical use, building the Roche palette of health diagnostics products and potentially allowing it to better target its own medicines toward individual patients. Illumina said on Jan. 10 that by the end of the year it would market a machine capable of scanning DNA in a day.
Roche fell 1.4 percent to 157.90 Swiss francs at 4:30 p.m. in Zurich.
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