Roche announces tender offer will not be extended

Offer set to expire April 20, Roche will look elsewhere for diagnostics growth

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SAN DIEGO—The months-long saga of Roche's attemptedacquisition of Illumina, Inc. came to an end today following Illumina's annualmeeting of stockholders on April 16, in which the company's stockholders votedto reject Roche's nominees and associated proposals.
Roche's efforts began in January with a tender offer of$44.50 per share in cash for all of Illumina's outstanding shares, an offerthat was set to expire at midnight on Feb. 24. The company also announced thatit would be presenting several nominees for election to Illumina's board at theSan Diego-based company's annual meeting. When Illumina decried the offer as"grossly inadequate" and only an approximate 102,165 shares had been tenderedto the offer by Feb. 24, Roche extended the offer to March 23, then again toApril 20 when minimal stockholder interest only increased the number of sharestendered to approximately 144,208. In keeping with insistence from bothIllumina and analysts that the $44.50 per share offer was too low, Rocheincreased the offer to $51 per share, for a total of nearly $6.5 billion.
Illumina released an announcement today regarding thepreliminary voting results from its April 18 annual meeting of stockholders, inwhich shareholders voted to reelect all four Illumina nominees to the board ofdirectors. The nominees elected are A. Blaine Bowman; Karin Eastham; Jay T.Flatley, Illumina's president and CEO; and William H. Rastetter, chairman.
Shareholders also rejected all of the proposals submitted byRoche at the annual meeting, which included proposals to increase the size ofIllumina's board of directors, amend the bylaws "to require that newly createddirectorships be filled only by a stockholder vote" and repeal any bylawamendments "adopted by the Board of Directors without stockholder approvalafter April 22, 2010." In keeping with the shareholders' rejection of the boardexpansion proposal, Roche's two additional nominees were not elected to the boardof directors.
Gaining a controlling majority of Illumina's board ofdirectors represented Roche's best chance of breaking the waiting game in lightof the staunch opposition from Illumina's management and pushing its offerthrough from within the company. In response to the preliminary results, Rocheannounced that it would not be extending its offer past the April 20 expirationdate.
"We continue to hold Illumina and its management in veryhigh regard but, with access only to public information about Illumina'sbusiness and prospects, we do not believe that a price above…$51 per sharewould be in the interest of Roche's shareholders," Severin Schwan, CEO ofRoche, said in a statement. "We have throughout this process desired to engagein a constructive dialogue with Illumina's management, listen to its views ofvalue and prospects and offer a fair and adequate price to Illumina'sshareholders. But in the absence of such discussions, our duty to bedisciplined with the assets of Roche's shareholders has led to this decision.Roche will continue to consider options and opportunities to develop furtherits portfolio of businesses in order to expand its diagnostics leadershipposition."
Flatley thanked the company's shareholders in a pressrelease for their "confidence in our ability to execute our strategic plan andcreate compelling value," and said that the board would continue to "protectand hold paramount the interests of our stockholders as we continue tocultivate Illumina's leadership position in a rapidly innovating and growingindustry."
"We are pleased that Roche has decided not to extend itsinadequate offer to acquire Illumina and that we can now return our full focusto growing our business, making the most of the expanding opportunities in ourspace and delivering superior results for our customers and stockholders," saidFlatley.

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