After an apparently unsuccessful attempt to stack Illumina's board in its favor, Roche ($RHHBY) appears to be heading toward ending its $51-per-share, $6.7 billion bid for the California gene sequencer/diagnostic company.
Investors reacted strongly, Bloomberg reports, pushing Illumina ($ILMN) down $3.05 to $40.95 in early Nasdaq trading. Roche, on the other hand, gained 1.2%, hitting 163.20 Swiss francs in early afternoon Zurich trading, according to the story.
The statement issued by the Swiss pharmaceutical company explains that the decision is based on "the apparent re-election of the incumbent directors of Illumina," and so the bid will expire April 20, 6 p.m. EST. Allowing the bid to expire at that point effectively ends it, Bloomberg explains, barring any last-minute development. As the news agency reminds us, Illumina held its annual shareholder meeting April 18, and Roche had nominated 6 directors and wanted to expand Illumina's board to 11 from 9. Illumina's management has opposed this move, as well as Roche's two bids to acquire the company in a hostile takeover. As of Tuesday, the article notes, three advisory firms sided with Illumina on the director nominee issue.
Roche explained further that the company "throughout this process desired to engage in a constructive dialogue with Illumina's management," which it holds in "very high regard." It also wanted to "listen to [management's] views of value and prospects, and offer a fair and adequate price to Illumina's shareholders. But in the absence of such discussions, our duty to be disciplined with the assets of Roche's shareholders has led to this decision."
Roche said it "will continue to consider options and opportunities to develop its portfolio of businesses in order to expand its diagnostics leadership position."