Roche might be in for a long battle…
After the board of director of Illumina rejected the unsolicited takeover offer from Roche on the 7th February, describing the bid as undervaluing Illumina’s “leadership position and future growth prospects”, Roche restated that it’s $5.7 billion price for Illumina was “full and fair and provides a unique opportunity for Illumina’s shareholders”. It might, however, be in for a long takeover battle, as Illumina can with some right claim that its 10-year history showed that the share slump it experienced in July last year – and which might well have precipitated Roche’s bid – was a temporary aberration.
Illumina’s annual filings, however, slightly delayed by the bid on the 25th January, indicate that while for the calendar year revenues increased by 17% to $1.06 billion, net income fell in the same period by 31% to $86.1 million.
And Roche is anything if not a determined bidder, if its takeovers of Genentech and Ventana are anything to go by. The latter acquisition in 2007/08 was a long drawn out affair, with Roche wrestling Ventana’s board into submission in almost nine months, and the management only ceding ground after a 20% rise on the initial bid. Such determination on Roche’s part, however, might let other potential interested parties think twice before throwing their hats – and money – into the ring.
