Roche disappointed with ISS recommendation
Posted: 6 April 2012 | | No comments yet
Roche released the following statement in response to a report issued by Institutional Shareholder Services…
Roche (SIX: RO, ROG; OTCQX: RHHBY) released the following statement in response to a report issued by Institutional Shareholder Services (“ISS”) recommending that shareholders of Illumina, Inc. (NASDAQ: ILMN) vote against the election of Roche’s independent director nominees to Illumina’s Board of Directors:
“While we are disappointed that ISS has recommended that Illumina shareholders vote against our director nominees at the Illumina annual meeting, we are pleased that ISS noted that ‘Roche would seem to be an excellent partner for Illumina as the sequencing industry grows more intertwined with new drug development.’ ISS also noted that the key to Illumina’s valuation falls in its commercialization strategy – a strategy that has not been tested but is an area in which we believe Roche could provide significant expertise,” said Severin Schwan, CEO of Roche Group.
Schwan continued, “We respectfully challenge ISS’ assertion that our current ‘bid does not provide a compelling starting point for negotiations.’ Our goal has always been to enter into a negotiated transaction with Illumina and we firmly believe that our present offer is more than adequate to serve as a basis for negotiation with Illumina. We remain willing to consider additional value if given the opportunity to enter discussions and perform due diligence. We expect that Illumina shareholders will support this objective and vote for our director nominees at the upcoming Illumina annual meeting.”
About the Offer
On January 27, 2012, Roche commenced a tender offer to acquire all outstanding shares of Illumina for $44.50 per share in cash and increased its offer on March 29, 2012 to $51.00 per share in cash for an aggregate of approximately $6.8 billion on a fully diluted basis. The increased offer represents a substantial premium to Illumina’s unaffected market prices: a premium of 88% over Illumina’s closing stock price on December 21, 2011 – the day before market rumors about a potential transaction between Roche and Illumina drove Illumina’s stock price significantly higher – and an 84% premium over the one-month historical average and a 64% premium over the three-month historical average of Illumina’s share price, both as of December 21, 2011.
In addition to its cash tender offer, Roche has nominated a slate of highly qualified, independent candidates for election to Illumina’s Board of Directors and proposed certain other matters for the consideration of Illumina’s shareholders at Illumina’s 2012 annual meeting, which if adopted, would result in Roche-nominated directors comprising a majority of the Illumina board.