Illumina soars on fresh Roche buyout rumors

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Rumor has it Roche ($RHHBY) is back on the hot stove and eyeing another bid for Illumina ($ILMN), and while analysts and journos are skeptical, the market sure seems to believe the hype. The gene sequencing company's shares jumped as much as 9.3% yesterday amid all the speculation.

Here's the new gossip: Sources tell Swiss newspaper L'Agefi that Roche and Illumina have agreed to an $8.1 billion buyout, besting Roche's previous offer of $6.7 billion--which was met with scoffs from Illumina's brass. Predictably, neither company is willing to comment on the report.

At the same time, analysts quoted by Bloomberg and Reuters say the rumors are highly unlikely, as coming back to the table with such a larger bid would be effacing for a big-time mover like Roche, and, they say, nothing has happened since the first takeover go-round that would warrant that kind of leap in price.

But the market either disagrees or doesn't care, as traders jumped all over the rumors and shot Illumina's share value up to $56.22 at Thursday's close.

L'Agefi reports that the two will announce the deal in January, and while its impossible to know whether the paper's sources are correct, Roche's interest in furthering its ability to produce targeted treatments and companion diagnostics is hardly a secret. The company has poured money and manpower into its Indiana-headquarter diagnostics unit, and CEO Severin Schwan said 60% of the drugmaker's pipeline treatments are being developed alongside companion diagnostics.

And if the company does end up snagging Illumina, at whatever price, it'll get a stable well-established experts on gene sequencing, giving it an even greater foothold in the burgeoning world of molecular diagnostics.

- read Bloomberg's take
- here's Reuters' story

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