Roche Stays Firm on Illumina Offer

With April 20 around the corner, the day when Roche Holdings Ltd.'s ( RHHBY ) tender offer for acquiring all outstanding shares of Illumina Inc. ( ILMN - Snapshot Report ) expires, the former is in no mood to extend its offer of $51.00 per share.

We note that in its constant endeavor to acquire Illumina, Roche had issued a letter to the shareholders of Illumina in the beginning of April, where, among other proposals, it requested the latter to elect Roche’s independent director nominees to Illumina’s Board of Directors at the company’s annual meeting.

Roche has been trying to acquire Illumina since January, when it had first announced its bid to acquire all shares of Illumina at an offer price of $44.50 per share (aggregate value $5.7 billion) in cash. Then, on February 27, Roche extended the time-period for its bid to March 23 from February 24, 2012. In March, Roche further extended the time period for acquiring all outstanding shares of Illumina to April 20, 2012, from the previously announced date (March 23, 2012).

Additionally, in the last week of March, Roche had increased its offer price for Illumina shares to $51.00 (aggregate value $6.7 billion) from $44.50 a share, while the other terms and conditions of the deal remained unchanged. Illumina rejected Roche’s offer, following which Roche issued a second letter to Illumina’s shareholders, in the beginning of April, requesting them to tender their shares to Roche for $51.00 a share.

Roche believes that this acquisition would strengthen its position in the sequencing and microarrays market. Moreover, it would help address the growing demand for genetic/genomic solutions.

We currently have a Zacks #3 Rank (short-term Hold rating) on Roche.