Institutional Shareholders Services (ISS), a major shareholder of US-based Illumina Inc, has urged the board of the gene sequencing company to reject Swiss drugmaker Roche's sweetened $51 per share takeover offer.
ISS sided with the Illumina's board for having rejected the revised $6.7 billion bid on the ground that it undervalued the company.
''The revised offer of $51 is not yet demonstrably in the range of a compelling starting point for negotiation, the board appears to have acted appropriately in rejecting the Roche bid," ISS said in its report.
ISS said that taking into account the valuation metrics of normal acquisitions, Roche's offer is inadequate for "a company whose real potential .... the vast end markets, in and beyond healthcare, which are beginning to turn to its technology."
Basel, Switzerland-based Roche, the world's biggest maker of cancer drugs, had last week increased its $44.50 a share offer by 15 per cent, to $51 a share, taking Illumina's purchse price to $6.7 billion. (See: Roche increases hostile offer for Illumina to $6.7 billion)
But the board of San Diego, California-based llumina rejected the increased takeover offer, saying it dramatically undervalued the company.