ROCHE EXTENDED its $5.7 billion hostile cash bid for US gene decoder Illumina yesterday, showing the Swiss drugmaker’s willingness to play a waiting game, an M&A strategy that has paid off in the past.
But analysts say Roche, which has been successful with previous hostile deals, will ultimately have to raise its $44.50 per share bid to win Illumina, whose shares closed at $51.22 on Friday.
Illumina has already adopted a “poison pill” defence strategy for Roche’s unsolicited bid, and has advised shareholders not to tender any of their shares on the grounds the price was too low.
Only about 0.1 per cent of Illumina’s shares outstanding have so far been tendered to Roche.
“Ultimately, we reckon Roche will get Illumina. It may take six to 12 months, and a sweetened offer,” analysts at bank Vontobel said. “We like the acquisition and believe it will be value-creating once integrated into Roches network.” Earlier acquisitions such as that of diagnostic test-maker Ventana and US biotech group Genentech show Roche is happy to take its time with deals and that it will ultimately prevail with a sweetened offer. – (Reuters)
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