Roche set to walk away from $6.8 billion bid for genetic specialist Illumina

NEW YORK, Wed Apr 18, 2012 – Swiss drugmaker Roche said on Wednesday it would not extend a $6.8 billion hostile offer for genetic specialist Illumina as the U.S. group’s shareholders blocked its move to appoint new directors.

Roche, which is now set to walk away from its takeover target, said an offer above $51.00 per share would not be in the interests of its own shareholders.

The tender offer for Illumina expires on Friday and Roche said it would not extend the bid as the U.S. firm’s management had refused to engage in constructive dialogue.

The decision is a victory for Illumina in its battle to stay independent, although some investors think Roche may wait in the wings for a fresh opportunity to pounce if the U.S. company’s shares underperform.

The gene sequencing specialist, which branded itself “the Apple of the genomics business,” rejected Roche’s sweetened takeover offer and had repeatedly urged shareholders to vote against appointing Roche’s nominees to its board.

“It won’t hurt Roche to send a signal that they can walk away from these deals,” said Navid Malik, an analyst at Cenkos Securities.

Roche, the world’s largest maker of cancer drugs, has been developing targeted therapies and Illumina’s technology would help it to progress further in this field as gene sequencing can better identify which patients benefit from a given drug.