MASSDEVICE ON CALL —Illumina’s (NSDQ:ILMN) board of directors adopted a "poison pill" strategy in response to a hostile takeover bid by Roche (PINK:RHHBY).
Illumina adopted a rights agreement which allows shareholders other than the a bidder to buy additional shares at a discounted price, potentially deterring would-be bidders by increasing costs.
"The Illumina board has taken this action to ensure that our stockholders receive fair treatment and protection in connection with any proposal or offer to acquire the company, including the proposal announced by Roche," Illumina CEO Jay Flatley said in prepared remarks.
The moves are designed to "deter coercive or otherwise unfair takeover tactics," in response to Roche’s hostile takeover bid, according to a press release.
Roche responded with a release of its own.
"Although not unexpected, Roche is disappointed that the Illumina Board of Directors has been unwilling to participate in substantive discussions with Roche regarding a negotiated transaction and has instead adopted this shareholder rights plan in response to the offer to acquire Illumina," according to a press release. "Roche’s all-cash offer represents a substantial premium and Roche is confident that Illumina shareholders will see the value of the offer."
Roche sent Illumina an unsolicited acquisition proposal f for a tender offer to acquire all outstanding shares of Illumina stock for $44.50 per share in cash, an 18% premium over ILMN’s closing share value of $37.68 Wednesday night.
The news sent Illumina shares skyrocketing, and they closed at $52.65 last night. ILMN shares were trading at $52.39 as of about 10:30 a.m. today.
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