Not even a month and Roche Holdings Ltd. (RHHBY) announced the extension of its Illumina, Inc. (ILMN) bid for the second time. Roche recently announced that it has extended the time period for acquiring all outstanding shares of Illumina to April 20, 2012, from the previously-announced date (March 23, 2012). Roche also said that apart from the extension of the tender offer expiration date, all other terms and conditions remain unchanged.
On the 27th of last month, Roche had extended the time-frame to March 23 from February 24, 2012. Roche had first announced its bid in January to acquire all shares of Illumina at an offer price of $44.50 per share (aggregate value $5.7 billion) in cash.
In mid-March 2012, the Federal Trade Commission (FTC) requested additional information regarding the proposed acquisition of Illumina. The request, termed a ‘second request,' sought additional information about Roche’s microarray business.
The second request extended the waiting period, imposed by the Hart-Scott-Rodino Antitrust Improvements Act, by 10 days after Roche complies with the request. The extension can be increased voluntarily by Roche or terminated sooner by the FTC.
Post the potential acquisition, Roche intends to combine Illumina with its Applied Science business, thereby strengthening its current offerings in the Life Science market. Roche operates through two segments – Pharmaceuticals and Diagnostics. Applied Science is a wing under the company’s Diagnostics division.
Roche believes that this acquisition will strengthen its position in the sequencing and microarrays market. Moreover, it will help address the growing demand for genetic/genomic solutions.
We currently have a Zacks #3 Rank (short-term Hold rating) on Roche. We believe that this transaction will add to the company’s portfolio, thereby driving long-term growth.
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