Illumina (ILMN) Gets Backing from ISS in Saying Roche (RHHBY) Offer is 'Inadequate'

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Illumina, Inc. (Nasdaq: ILMN), announced that Institutional Shareholder Services Inc. (“ISS”) considers the Roche (OTC: RHHBY) offer to acquire Illumina inadequate and has recommended that its clients support the re-election of Illumina’s slate of directors and vote against all Roche proposals at Illumina’s 2012 Annual Meeting of Stockholders to be held on April 18, 2012. Another leading proxy advisor, Egan-Jones Ratings Company (“Egan-Jones”), also recommended that its clients support the re-election of the incumbent directors and reject Roche’s proposals. ISS and Egan-Jones are leading providers of independent proxy voting advice to institutional investors and other fiduciaries throughout the world.

In its April 6, 2012 M&A Edge report, ISS stated:

• “…the current bid of $51.00…does not provide meaningful compensation for the potentially enormous long-term opportunity shareholders would forego by selling at this point…[and] falls short of providing a compelling enough consideration to cause Illumina shareholders to support Roche's nominees.”
  
  
• “With the lack of serious competition in the near future, and the vast potential for sequencing that is already starting to appear, the board should rightfully be concerned about unnecessary truncation of value by selling the company at too low a valuation of its future.”
  
  
• “Traditional financial metrics that focus on near-term or past profitability -- exactly the metrics on which Roche has focused -- are not particularly useful because they do not measure the one thing both current shareholders and Roche are most interested in: the commercial potential of the company's disruptive technology, across a number of large addressable markets.”
  
  
• “The board's decision to pull the annual meeting ahead by approximately three weeks—rather than, as sometimes happens, to delay the shareholder vote -- suggests both an openness to shareholders' interests, and confidence in the integrity of the board’s own position on the value being offered.”

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