Wednesday, January 25, 2012

Seeking Alpha: Roche Looks To Regain Life Sciences Legitimacy With A Bold Bid For Illumina

It wasn't that long ago that I mused about Roche (RHHBY.PK) having lost its way and much of its relevance in the life sciences space. With a bold announcement Tuesday night, it looks like this Swiss medical giant is looking to fix this problem in a big way. Roche is proposing to acquire sequencing giant Illumina (ILMN) for $44.50 in cash.

The Proposed Deal
At the proposed price, Roche is offering to pay Illumina investors an 18% premium over Tuesday's close, but a 60% premium to Illumina's price when rumors of a possible deal started lifting these shares up off the mat. If the deal goes through, Roche will be paying a lofty 18 times trailing EBTIDA and more than five times trailing revenue.

That may be a reasonably large "if", though. Like most companies in the med-tech space, Roche prefers to keep things quiet and relatively friendly. The fact that Roche is taking this approach suggests that Illumina either turned them down flat or held out for a sweeter price. Now Roche is looking for shareholders to apply pressure on the Illumina board to sit down at the bargaining table.

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Roche Looks To Regain Life Science Legitimacy With A Bold Bid For Illumina

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