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By Michael Fitzhugh

Roche (OTCQX:RHHBY) decided not to extend its $6.8 billion hostile bid for the gene sequencing giant Illumina (NASDAQ:ILMN) after that company's shareholders rejected efforts to seat new Roche-friendly directors on its board.

Raising its $51 per share offer for Illumina would not be in the interest of Roche's shareholders, says the company's CEO, Severin Schwan. Roche, which had sought an insider's view of Illumina's business and prospects, has been rebuffed by Illumina in that pursuit since its initial offer of $44.50 per share for the company on January 27.

Illumina fought off Roche's overtures from the initial offer onward. It was successful in convincing its shareholders that Roche's offer undervalued their company, and to vote down several Roche-friendly proposals, including one that would have expanded the size of Illumina's board to create new directorships for Roche nominees.

"We are pleased that Roche has decided not to extend its inadequate offer to acquire Illumina and that we can now return our full focus to growing our business, making the most of the expanding opportunities in our space, and delivering superior results for our customers and stockholders," says Jay Flatley, Illumina's president and CEO.

Shares of Illumina fell to near $44 per share on April 20, the day the offer expired, below Roche's initial $44.50 per share offer. Shares of Roche rose slightly.

Roche has been a global leader in the development of personalized therapies for cancer, especially through the work of Genentech. A successful bid for Illumina would help strengthen its diagnostics business, creating a personalized medicine powerhouse capable of not only driving a transformation in the treatment of disease, but its diagnosis as well.

Though Roche has walked away from its most recent offer, it may not be its last attempt to acquire Illumina. Roche fought to acquire Ventana Medical Systems for seven months before succeeding by offering a 19 percent premium; and it took close to eight months before it was able to acquire the remaining part of Genentech it did not already own for $46.8 billion. In that deal it had to raise its offer to $95 per share, $6 a share more than the original offer of $89 per share.

"Roche will continue to consider options and opportunities to develop further its portfolio of businesses in order to expand its diagnostics leadership position," says Schwan.

Source: Illumina Stays Independent But Drops As Roche's Offer Expires