Roche has increased its offer for Illumina by $1bn after holding discussions with the company’s major shareholders.
Days after extending its original $5.7bn cash offer, Roche has increased its price per share from $44.50 to $51 after seeing Illumina refusing to change its dismissive stance.
Franz Humer, Roche Chairman, said in a letter to Illumina CEO Jay Flatley that “we have had a number of productive discussions with Illumina’s shareholders and we have observed the market reaction to our offer”.
The San-Diego-based company has now told shareholders not to take any action on the revised offer insisting it will “thoroughly review” the new proposal.
The pharmaceutical giant has been searching to increase its development of target therapies for cancer treatments. Illumina’s gene sequencing technology would help the Swiss-based company progress in this field.
It has already made two unsuccessful hostile takeover bids for the company but analysts predict its latest offer could see a deal completed in as little as two months.
“It was certainly triggered by discussions with the biggest shareholders,” said Martin Voegtli, analyst at Capital Markets. “The top seven hold 55 percent, so $51 is probably the consensus amongst them. Now the pressure on the Illumina board and management is increasing and that’s a big step towards speeding up this deal.”
The seven biggest shareholders in Illumina are Capital Research Global Investors, Baillie Gifford & Co, Sands Capital Management, Morgan Stanley Investment Management, Jennison Associates, AllianceBernstein and Edgewood Management.
The latest offer includes the same deadline of 20 April for a decision – two days after the Illumina AGM, where Roche aims to gain control of its board of directors.
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