Piper Jaffray Maintains Neutral on Illumina After Roche's Tender Offer

Piper Jaffray has published a research report on Illumina

after Roche announced a $44.50/share tender offer to acquire the company last night. In the report, Piper Jaffray writes, "Roche announced a tender offer to acquire Illumina for $44.50 or ~$5.7B on a fully diluted basis, representing an 18.2% premium to yesterday's closing price. We view the Roche/Illumina combination as a strategic fit, with Illumina benefiting from Roche's diagnostic presence and broad distribution and Roche gaining access to the market leading next-generation sequencing business. Illumina's board has rejected Roche's overtures and we suspect an offer greater than $44.50 (at least 25% higher or ~$56) will be necessary to seal the deal, resulting in a potentially drawn out process (similar to Roche's acquisition of Ventana)." Piper Jaffray maintains its Neutral rating on Illumina, which closed yesterday at $37.69.