Illumina has sent a fourth letter to shareholders urging them to reject Roche’s offer of $51 per share, which Illumina claims is opportunistic and undervaluing the company. In addition, the letter urges shareholders to vote against the candidates that Roche has nominated for election to Illumina’s board of directors. The election will take place at the board’s general meeting on Apr. 18, 2012.

According to the letter, Illumina’s revenue streams are being increasingly driven by nonresearch uses that have the potential to more than double the size of the company’s addressable market from $4 billion to over $8 billion. The company has also received the backing of Institutional Shareholder Services (ISS), Egan-Jones Ratings Company and Glass, Lewis & Co., which provide independent proxy voting advice to institutional investors. All three firms have advised shareholders to support the re-election of Illumina’s slate of directors and vote against all Roche proposals.

“We are very pleased that all three of the leading proxy advisors... have now recommended that their clients support the re-election of Illumina’s slate of directors and vote against all of Roche’s proposals at Illumina’s upcoming Annual Meeting,” said Jay T. Flatley, president and CEO of Illumina, in a statement. “The simple fact remains that Roche’s unsolicited offer clearly undervalues Illumina and that our highly qualified and experienced directors are best positioned to create value for Illumina’s stockholders.”

Roche has also been sending letters to shareholders urging them to see the merits of the transaction. In response to the recommendation from the ISS, Severin Schwan, CEO of Roche Group, noted, “While we are disappointed that ISS has recommended that Illumina shareholders vote against our director nominees at the Illumina annual meeting, we are pleased that ISS noted that ‘Roche would seem to be an excellent partner for Illumina as the sequencing industry grows more intertwined with new drug development.’ ISS also noted that the key to Illumina’s valuation falls in its commercialization strategy – a strategy that has not been tested but is an area in which we believe Roche could provide significant expertise.”

Roche made its first offer to acquire all outstanding shares of Illumina in February for $44.50 per share. However, the offer was increased to $51 per share at the end of March.

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