Here’s Why Roche Dropped Its Illumina Bid

Drugmaker Roche has admitted defeat in its pursuit of diagnostics firm Illumina (NASDAQ:ILMN). The Swiss company said on Wednesday it would not raise its current offer price of $51 per Illumina share, amounting to about $6.2 billion, and will let the offer expire later in the day. Roche said any offer above the current price would not be in the interest of its shareholders.

The Illumina board was successful in getting a majority shareholder vote to elect all its incumbent directors at the company’s annual meeting on Wednesday, and by a large margin. Roche had nominated six directors of its own and had been trying to propose expanding the size of Illumina’s board to 11 from nine. However, shareholders seem to have listened to several Illumina proxy advisory firms, including Institutional Shareholder Services, which recommended re-electing the current directors and rejecting Roche.

Roche, the world’s biggest cancer drugmaker, had been trying to convince Illumina investors that the takeover would help the smaller firm expand in the genetic analysis market. The Swiss drugmaker had raised its bid for each of the San Diego company’s shares from $44.50 in January to $51 last month. However, Illumina insisted the price was still too low. Illumina shares had stayed consistently above Roche’s offer prices until falling below $51 on Tuesday, when uncertainty was at its maximum.

Illumina stock fell more than 6 percent on Wednesday morning, to $41.25.