Roche displays patience with Illumina bid

After all the fanfare behind Roche's ($RHHBY) $5.7 billion hostile bid for gene sequencing company Illumina ($ILMN), it looks as if the company will have to dig in for a pretty long fight.

As Reuters reports, Illumina this week deemed the offer as undervalued and warned shareholders to hold back from selling any shares to Roche. (Of course, Illumina already adopted a "poison pill" shareholder rights strategy, so we could see where this was going early on). Undaunted, Roche said its offer of $44.50 per share remains "full and fair."

Sounds like a stalemate, at least on the surface. But some analysts quoted in the Reuters article see Roche as ultimately winning, either after intense marketing and networking with Illumina's major shareholders or with a higher offer.

"Ultimately they hold the key to close the deal," Vontobel analyst Andrew Weiss told Reuters.

And as the article points out, Roche has raised offers in previous bids, even when it argued its initial bid was "full and fair." This includes the company's successful pursuits of Genentech and test maker Ventana. And Illumina shareholders can only gain if the company holds out for a better deal.

Illumina's machines decode a person's entire genome and the company is a gene sequencing market leader. So Roche stands to gain enormously if it wins, Reuters notes.

- here's the Reuters story

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