Roche makes $5.7 billion hostile bid for Illumina

Swiss drugs and diagnostic major Roche (ROG: SIX) announced this morning that it is proposing to acquire all outstanding shares of Illumina, (Nasdaq: ILMN), a USA-based provider of integrated systems for DNA sequencing, for $44.50 per share in cash, or an aggregate of approximately $5.7 billion on a fully diluted basis. The Roche moves comes despite the US firm’s reluctance to enter discussions.

This offer represents a 64% premium over Illumina’s stock price on December 21, 2011 - the day before market rumors about a potential transaction between the two companies drove Illumina’s stock price significantly higher - a 61% premium over the one-month historical average and a 43% premium over the three-month historical average of Illumina’s share price, both as of December 21. It also represents a 30.1x multiple of Illumina’s projected forward earnings based upon analysts’ current consensus estimates for 2012, said Roche.

Illumina would strengthen Roche’s position in sequencing and microarrays