Swiss drugmaker Roche will not extend its hostile $6.8-billion bid for Illumina Inc. after the San Diego biotech company's shareholders rejected Roche's attempts to appoint new board members.
Roche's current offer of $51 per Illumina share will expire on Friday. Severin Schwan, the company's chief executive, said in a statement Wednesday that a higher price is not "in the interest of Roche's shareholders."
Schwan said that Illumina, which makes products used for genetic analysis, had failed to "engage in a constructive dialogue" even after Roche boosted its original January offer of $44.50 per share to $51 per share on March 29. Illumina Chief Executive Jay T. Flatley called the offer "inadequate."
The new price represents an 88% premium over Illumina's closing price on Dec. 21, before rumors of a potential acquisition caused the stock to spike, according to Roche. Based off Illumina's Wednesday close of $44.51 – a 51-cent, or 1.16% increase – Roche's offer represents a nearly 14.6% premium.
On Wednesday, Illumina said its shareholders snubbed several proposals from Roche, including one to increase the size of the board and another that nominated two candidates as board members, in preliminary voting. Instead, they backed four contenders for the board who were recommended by Illumina.
"We are pleased that ... we can now return our full focus to growing our business, making the most of the expanding opportunities in our space, and delivering superior results for our customers and stockholders," Flately said in a statement.
Schwan said Roche "will continue to consider options and opportunities to develop further its portfolio of businesses in order to expand its diagnostics leadership position."
Roche's healthcare products include oncology, virology and metabolism medications, cancer diagnostics and diabetes management. The company, which also owns South San Francisco-based Genentech, employed more than 80,000 people last year.