UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
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ILLUMINA, INC.
(Name of Registrant as Specified in its Charter)
CKH ACQUISITION CORPORATION
ROCHE HOLDING LTD
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CONFIDENTIAL
DISCUSSION MATERIALS
January 24, 2012
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Disclaimer
These Discussion Materials are strictly confidential and have been prepared by
Greenhill and Co., LLC ("Greenhill") and Citigroup Global Markets Limited
("Citi" and, together with Greenhill, the "Advisors") for the use of F. Hoffmann
-La Roche Ltd. (the "Company") and are subject to the Advisors' respective
engagement letters with the Company. These Discussion Materials contain
information provided to the Company solely for use by the Company in its
consideration of a transaction involving the Company (and/or its affiliates) and
Illumina, Inc. ("Illumina") and may not be used for any purpose or disclosed to
any other person without the Advisors' prior written consent, and should not be
relied upon by any other person, including Illumina or its shareholders. These
Discussion Materials are not intended to be and do not constitute a
recommendation to any person or entity as to whether to acquire or dispose of or
take any other action in respect of any securities of the Company or any other
person, including Illumina. These Discussion Materials are for information only
and do not constitute a recommendation as to whether any holder of shares of
Illumina should tender in any potential offer by the Company and/or its
affiliates. These Discussion Materials have not been prepared for the purpose of
recommending a fair or appropriate price for the shares of Illumina. These
Discussion Materials do not constitute an opinion by the Advisors as to the
fairness to the Company or its shareholders or any other entity or person,
including, without limitation, Illumina or its shareholders, of the terms of any
actual or proposed transaction involving the Company and Illumina. The Advisors
have not been asked to and have not delivered a fairness opinion to the board of
directors of the Company or any of its affiliates in connection with the
Company's consideration of the acquisition of Illumina.
In preparing these Discussion Materials, the Advisors, among other things, (i)
reviewed certain publicly available financial statements of Illumina and certain
other publicly available business and financial information relating to
Illumina, including financial projections from Wall Street analysts, that they
deemed relevant, (ii) reviewed the historical market prices and trading activity
for the common stock of Illumina, as well as a group of other comparable
publicly traded life science tools companies, and (iii) reviewed historical
premiums paid in both selected precedent MandA transactions involving life
science tools companies and selected unsolicited transactions, as well as
multiples of selected financial metrics in selected precedent MandA transactions
involving life science tools companies. In addition to the foregoing, the
Advisors conducted such other analyses and examinations and considered such
other information and financial, economic and market criteria as they deemed
appropriate. In preparing these Discussion Materials, the Advisors have relied
on such publicly available information and other information provided to,
discussed with or reviewed by the Advisors, and has assumed and relied upon,
without independent verification, the accuracy and completeness of all such
information. The Advisors do not assume any responsibility or liability
therefor.
These Discussion Materials do not purport to be a complete description of the
analyses performed or factors considered by the Advisors. The order of the
analyses described and the results of the analyses do not represent relative
importance or weight given to these analyses by the Advisors. The preparation of
a financial presentation is a complex process involving subjective judgments and
is not necessarily susceptible to partial analysis or summary description.
The Advisors selected precedent transactions that in their judgment were
relevant for their analysis. Although the advisors analyzed the multiples and
premiums implied by the selected transactions, none of these transactions or
associated companies is identical to the proposed acquisition of Illumina. The
Advisors selected the companies in the comparable company analysis because,
among other reasons, they are publicly traded companies with operations or
businesses that for purposes of analysis may be considered reasonably comparable
to those of Illumina. None of the selected companies is directly comparable to
Illumina.
No representation or warranty, express or implied, is made in relation to the
accuracy or completeness of the information presented herein or its suitability
for any particular purpose. The Advisors have not conducted any evaluation or
appraisal of any assets or liabilities of Illumina or any other person referred
to in these Discussion Materials. These Discussion Materials speak only as of
the date given and these Discussion Materials are necessarily based upon
information available to the Advisors, and financial, stock market and other
conditions and circumstances existing and disclosed to the Advisors, as of the
date of these Discussion Materials. The Advisors do not undertake and have no
obligation to update or otherwise revise the information in these Discussion
Materials. The Advisors do not provide legal, tax or accounting advice and
nothing herein shall be construed as such advice.
Greenhill has provided certain financial advisory services to the Company and
its affiliates, including with respect to the Company's acquisition of Illumina,
and Greenhill may provide services to the Company and its affiliates or Illumina
in the future. Citi has provided certain financial advisory services to the
Company and its affiliates, including with respect to the Company's acquisition
of Illumina, and Citi may provide services to the Company and its affiliates or
Illumina in the future.
Under the terms of each of the Advisors' engagement with the Company, the
Company agreed to pay each of the Advisors usual and customary financial
advisory fees which are contingent upon the Company's acquisition of Illumina.
In addition, the Company has agreed to reimburse the Advisors for the respective
reasonable travel and other out-of-pocket expenses incurred by such Advisors,
including the fees and expenses of legal counsel, and to indemnify the Advisors
and their respective related parties against liabilities relating to or arising
out of the Advisors' engagement.
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TABLE OF CONTENTS
1. EXECUTIVE SUMMARY
2. Valuation Supporting Materials
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Greenhill and Citi understand that Roche intends to commence a cash tender offer
to acquire Illumina, Inc. ("Illumina" or the "Company") at $44.50 per share
Price Performance 12/12/11 --1/9/12
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EXECUTIVE SUMMARY
EXECUTIVE SUMMARY
* During the past six weeks, Roche has repeatedly tried to engage Illumina's
Board of Directors
* On December 13, 2011, Roche's Chairman and a member of Roche's Board met
with Illumina's CEO and Chairman. During the meeting, Roche's Chairman
described Roche's strategic interest in genetic sequencing solutions and
stated that Roche would be interested in acquiring Illumina
* On December 21, 2011, Roche's Chairman indicated to Illumina that Roche
would be willing to consider a price of up to 50% over Illumina's
then-current share price of $26.71
[] After this initial attempt at conveying price to Illumina, a news story was
published the next day speculating about a transaction between the parties,
which caused Illumina's stock price to jump by 7%
[] Since then, numerous articles and media speculation about a transaction
have driven noticeable volume and price increases
* On December 28, 2011, Illumina's CEO told Roche's Chairman that Illumina
would be unable to convene its Board until the end of January, but it would
consider the proposal at that time
* Roche sent Illumina a private letter to formally propose an all-cash offer
of $40.00 per share on January 3, 2012
* On January 9, 2012, Roche's financial advisors spoke with Illumina's
financial advisor, and Roche's financial advisors expressed Roche's
disappointment at the slow rate of progress
* On January 13, 2012, Roche's financial advisors spoke with Illumina's
financial advisor. The parties discussed the recently concluded investor
conference at which Illumina introduced an upgraded sequencing system and
announced its preliminary fourth quarter results
* On January 17, 2012, Illumina convened a Board meeting and on January 19,
it sent a letter to Roche formally rejecting the $40.00 per share offer
Source: FactSet
Note: See composition of peer index on page 10
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OVER THE PAST YEAR, ILLUMINA HAS UNDERPERFORMED ITS PEERS AND THE BROADER MARKET
EXECUTIVE SUMMARY
ILLUMINA STOCK PERFORMANCE
* Illumina's stock dropped as much as 60% from its 52-week high because of
several factors, including:
[] Twice-lowered revenue guidance after a drop in orders due to the
constrained government spending environment
- Government and academic clients account for 80% of Illumina's sales
- Demand for its products was boosted by the 2009 stimulus package and this
funding was running out
[] shift in buyer preferences from high-cost, high-capacity machines ($500k+)
to low-cost, low-capacity machines ($50k+) and uncertainty surrounding this
product line transition
[] Increased competition in its low-cost product line from Life Technologies
and others
o llumina is still facing revenue headwinds due to an unclear government
spending picture
[] Visibility on the FY 2013 budget for the National Institutes of Health
(NIH) remains clouded as sequestration cuts imply a decrease of
approximately 8%
[] The NIH is a significant customer of Illumina (approximately one-third of
sales)
o Illumina's announcement at the JP Morgan Healthcare Conference in
mid-January was seen as a positive sign for the Company
[] Illumina said it would reinstate 2012 guidance on its Q4 earnings call at
or above current analyst estimates, removing a substantial amount of
near-term uncertainty
[] Illumina also introduced the HiSeq 2500, which can sequence an entire human
genome in a day and will help Illumina match competitive threats from Life
Technologies and others
o Despite this recent positive news, median research analyst price targets on
Illumina's stock have remained relatively unchanged
o Additionally, many short sellers have been covering their position after
management reinstated guidance
[] As of December 31, 2011, 18% of Illumina's basic shares outstanding were
sold short
Source: FactSet, Bloomberg
(1) As of 1/23/12. See composition of peer index on page 10
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An offer of $44.50 per share gives an implied equity value for Illumina of $5.7
billion and an implied enterprise value of $5.6 billion
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EXECUTIVE SUMMARY
PRICING
Summary Evaluation of Offer Price
* Higher cash value relative to Illumina's share price, particularly in a
period of market uncertainty
[] Implies 1-day, 1-week and 1-month premiums (1)[] of 64%, 64% and 57%,
respectively
[] Since 2006, similar life sciences tools industry transactions have seen
average premiums between 30% and 40% over similar periods (2)
* Above transaction premiums paid in precedent unsolicited transactions
[] Comparable transaction set includes median premiums to the unaffected stock
price prior to the announcement of 54%, 51% and 49% for 1-day, 1-week and
1-month, respectively (3)
* Implies a valuation multiple of 30.1x 2012E net income (4), which is higher
than the Company's publicly traded peers
[] Core comparable set exhibits median multiples of 14.6x 2012E net income
(4)(5)
[] Offer implies a PEG ratio of 1.79x, which is at the high end of the range
of Illumina's peers
- Offer also implies a PEG ratio that is approximately equal to Illumina's
three-year high and above its three-year average
* Implies 1-day and 1-month average premiums (1) of 64% and 61%,
respectively, and LTM(6) revenue and EBITDA multiples of 5.2x and 18.1x,
respectively, which are above precedent life science tools transactions (2)
[] The precedent transactions have median 1-day and 1-month average premiums
to the unaffected stock price of 33% and 37%, respectively and LTM revenue
and EBITDA multiples of 3.3x and 16.0x, respectively
* Exceeds median Wall Street research analyst price target of $34.00 as of
January 23, 2012
Source: FactSet, CapitalIQ, I/B/E/S consensus, Bloomberg
(1) Premiums based on unaffected closing share price of $27.17 on 12/21/11, the
day prior to market rumors about a potential acquisition of Illumina by Roche
(2) Includes selected pending and completed change of control transactions with
targets in the biotechnology research equipment manufacturers and biological
products and life sciences tools and services manufacturers sectors since 2006
(3) Includes unsolicited transactions in all sectors over $1 billion with U.S.
targets since 2000
(4) Based on I/B/E/S consensus
(5) Includes Thermo Fisher, Becton, Dickinson, Agilent, Life Technologies,
Sigma-Aldrich, Waters, Mettler -Toledo, Qiagen, PerkinElmer, Bio-Rad
Laboratories, Bruker and Techne
(6) LTM as of 9/30/11
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Table of Contents
1. Executive Summary
2. VALUATION SUPPORTING MATERIALS
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MEDIA SOURCES
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Valuation Supporting Materials
Media Observations
Significant Recent Commentary on Illumina as a Takeover Target
SELECTED COMMENTARY
"Illumina Rises the Most Since January 2010 on Takeover Talk"
"Illumina, a maker of tools for genetic analysis, gained the most in a month
after a StreetInsider.com report raised the possibility the company may be a
takeover target.
Illumina increased 6 percent to $29.44 at the close in New York, the largest
single-day jump since November 4. The shares have declined 54 percent this year.
'When stocks are beaten up like Illumina has been, you often get this chatter,'
said Les Funtleyder, a health-care strategist and portfolio manager at Miller
Tabak"
"Quick Take: Real or Not, Deal Talk Was Only a Matter of Time"
"According to Briefing.com, streetinsider.com, and other services, today's >10%
move by Illumina is attributable to reports that Siemens may be interested in
acquiring the company[] Whether this report is accurate or not, we expect 2012
to be a consolidation year in the group"
"Roche is Open to $3 Billion Deal, Would 'Seize' Opportunity"
"Roche is open to a deal as big as $3 billion and the Swiss drugmaker is ready
to 'seize' the right opportunities for acquisitions, Chief Executive Officer
Severin Schwan said.
Illumina[]rose on speculation the company may be a target for Roche, said Les
Funtleyder, a New York-based analyst for Miller Tabak. Shares in the San
Diego-based company climbed as much as 9.5 percent and were up 7.7 percent at
12:08 p.m. in New York. Illumina has dropped 54 percent this year on concerns
the government and academia may cut research funding"
"Takeover Speculation Surrounds Illumina Again"
"Takeover speculation is back on Illumina[]"
"Takeout Chatter, Upcoming News Drive Recent Volatility"
"The stock has seen increased volatility since December 2011 as media outlets
(i.e. Bloomberg, StreetInsider) have highlighted the possibility of Illumina as
a takeover target"
"Stock Run Too Much, Too Soon"
"Illumina shares have risen 18% in the past 3 weeks (as compared to the sector
being up 9% and the SandP nearly 5%), driven, in our view, by takeout
speculation and, less so, the potential for surprise announcements in
conjunction with their presentation at an investor conference this Tuesday"
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From when takeover rumors were first reported on December 22 to when Illumina publicly spoke at an investor conference, Illumina's stock surged 17% in a relatively flat market, along with substantial increases in trading volume for the stock and call options [GRAPHIC OMITTED] Valuation Supporting Materials RECENT TRADING PERFORMANCE SIGNIFICANT INCREASE FOR ILLUMINA SINCE TAKEOVER RUMORS FIRST PUBLISHE [GRAPHIC OMITTED] Source: FactSet, Bloomberg Note: Peer index includes Thermo Fisher, Becton, Dickinson, Agilent, Life Technologies, Sigma-Aldrich, Waters, Mettler-Toledo, Qiagen, PerkinElmer, Bio-Rad Laboratories, Bruker and Techne. Stock price data weighted based on market capitalizationd |
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Illumina's public market valuation is at a premium to peers based on forward
earnings and in line on a growth -adjusted basis
Additionally, the implied multiples of Roche's offer exceed the highest forward
P/E multiples of its peers
Source: Company filings, Capital IQ, I/B/E/S consensus as of 1/23/12
Note: Median excludes Illumina
Note: Illumina equity value assumes basic shares outstanding of 121.4 million,
10.4 million options outstanding with an average exercise price of $29.57 and
3.1 million RSUs. Assumes conversion of $40 million of convertible notes at
conversion price of $21.83 and $920 million of convertible notes at conversion
price of $83.55 for which shares are only issued for excess of conversion value
above par value and includes make-whole premium on convertible notes
Note: Life Technologies equity value pro forma for recent issuance of 2.7
million shares
(1) Represents an offer price for Illumina of $44.50 per share
(2) Calculated using Illumina's share price of $27.17 on 12/21/11, the day prior
to market rumors about a potential acquisition of Illumina by Roche
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VALUATION SUPPORTING MATERIALS
COMPARABLE P/E AND PEG MULTIPLES
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Roche's offer implies a priceto-earnings-growth ratio which is approximately
equal to Illumina's three-year high and above its three-year average
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VALUATION SUPPORTING MATERIALS
ROLLING PEG ANALYSIS
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Source: FactSet as of 1/23/12
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Roche's offer is at the high end of valuation multiples paid in recent precedent
life science tools transactions
Source: Company filings, Bloomberg
Note: Includes selected announced, closed and effective transactions since 2006
in the biotechnology research equipment manufacturing and biological products
and life sciences tools industries. Excludes Illumina/Solexa (11/13/06) because
the multiples are not meaningful
Note: All EBITDA figures include stock-based compensation as an expense but
exclude restructuring and other one-time charges
Note: Roche offer excluded from median calculations Note: LTM statistics for
Illumina as of 9/30/11. Illumina enterprise value assumes basic shares
outstanding of 121.4 million, 10.4 million options outstanding with an average
exercise price of $29.57 and 3.1 million RSUs. Assumes conversion of $40 million
of convertible notes at conversion price of $21.83 and $920 million of
convertible notes at conversion price of $83.55 for which shares are only issued
for excess of conversion value above par value and includes make-whole premium
on convertible notes. Also includes $1,132 million in cash and $960 million in
convertible notes and adds net cash benefit of unwinding call spread hedge on
certain convertible notes
Note: Revenue, EBITDA, cash and debt for Applied Biosystems only include the
portion of the consolidated company specifically allocated to the Applied
Biosystems business per company filings
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VALUATION SUPPORTING MATERIALS
PRECEDENT TRANSACTIONS
MULTIPLES
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Roche's offer gives Illumina shareholders a premium based on Illumina's trading
price before the commencement of takeover rumors
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VALUATION SUPPORTING MATERIALS
PRECEDENT TRANSACTIONS
PREMIUMS TO UNAFFECTED STOCK PRICE
Source: Company filings, Bloomberg, FactSet
Note: Includes selected announced, closed and effective transactions since 2006
in the biotechnology research equipment manufacturing and biological products
and life sciences tools sectors
Note: Roche offer excluded from median calculations
Note: Roche offer represents an offer of $44.50 per share. 1-day price of $27.17
and 1-month average price of $27.65 based on a starting date of 12/21/11, the
day prior to market rumors about a potential acquisition of Illumina by Roche
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Roche's offer is above the median analyst price target for Illumina's stock
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VALUATION SUPPORTING MATERIALS
ANALYST PRICE TARGETS
[GRAPHIC OMITTED]
Source: Wall Street research, Bloomberg
Note: Excludes price targets issued prior to 12/1/11
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Roche's offer is above the median premiums offered in precedent unsolicited
transactions
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VALUATION SUPPORTING MATERIALS
PRECEDENT UNSOLICITED TRANSACTIONS
Date Enterprise Offer Premium to Unaffected
Announced Target Name Acquiror Name Value Price 1 Day 1 Week 1 Month 52 Week All Time
($ bn) High High
1/24/12 Illumina Roche (1) $5.6 $44.50 64% 64% 57% (44%) (44%)
SOLD TO INITIATOR
-----------------
6/6/11 Temple-Inland International Paper $4.3 $32.00 52% 38% 35% 22% (52%)
8/29/10 Genzyme Sanofi 20.1 74.00(2) 46% 38% 49% 23% (12%)
2/28/10 OSI Pharmaceuticals Astellas 3.4 57.50 55% 55% 66% 44% (42%)
8/22/08 Alpharma King Pharmaceuticals 1.3 37.00 54% 51% 49% 29% (49%)
6/11/08 Anheuser-Busch INBEV 59.8 70.00 33% 35% 48% 27% 27%
10/12/07 BEA Oracle 7.0 19.38 42% 38% 46% 16% (78%)
6/26/07 Ventana Medical Systems Roche 3.4 89.50 72% 69% 76% 66% 66%
11/6/06 Swift Transportation Saint Corporation 2.7 31.55 31% 25% 23% (6%) (6%)
8/19/06 Gold Kist Pilgrim's Pride 1.1 21.00 62% 64% 61% 5% (12%)
1/3/06 Engelhard BASF 5.6 39.00 29% 27% 30% 24% 18%
8/1/05 Shurgard Storage Centers Public Storage 5.1 65.16 39% 41% 42% 37% 37%
5/24/04 NeighborCare Omnicare 1.8 34.75 97% 94% 44% 33% 9%
6/6/03 PeopleSoft Oracle 9.8 26.50 75% 62% 64% 18% (54%)
2/22/02 TRW Northrop Grumman 13.3 60.00 51% 33% 54% 32% (8%)
11/13/00 Willamette Industries Weyerhaeuser 8.0 55.50 60% 57% 106% 14% 6%
5/2/00 Bestfoods Unilever 24.3 73.00 42% 36% 53% 22% 20%
2/23/00 Mirage Resorts MGM Grand 7.0 21.00 93% 86% 67% (20%) (31%)
Mean 55% 50% 54% 23% (9%)
Median 52% 41% 49% 23% (8%)
High 97% 94% 106% 66% 66%
Low 29% 25% 23% (20%) (78%)
Sold to White Knight
--------------------
3/29/11 Cephalon Valeant / Teva $6.8 $81.50 42% 45% 46% 12% (4%)
1/27/09 CV Therapeutics Astellas / Gilead Sciences 1.4 20.00 76% 88% 123% 66% (79%)
7/31/08 Imclone Systems Bristol-Myers Squibb / Eli Lilly 7.1 70.00 51% 55% 76% 42% (20%)
8/9/06 Banta Cenveo / R.R. Donnelley 1.2 52.50 54% 50% 18% 0% 0%
3/7/01 Barrett Resources Shell Oil / The Williams Cos. 2.7 73.00 60% 65% 48% 22% 22%
3/2/00 Shared Medical Systems Eclipsys / Siemens 2.2 73.00 85% 81% 49% (1%) (16%)
All Deals Mean 57% 54% 55% 23% (11%)
All Deals Median 54% 51% 49% 22% (8%)
Healthcare Industry Transactions
All Deals High 97% 94% 123% 66% 66%
All Deals Low 29% 25% 18% (20%) (79%)
Source: Company filings, Capital IQ, FactSet, Thomson
Note: Includes selected transactions over $1 billion with U.S. targets since
2000. All premiums show price increase relative to 1-day, 1-week, or 1-month
prior to "unaffected" share price date immediately preceding the announcement of
the launch of the unsolicited offer
(1) Represents an offer price for Illumina of $44.50 per share; excluded from
mean, median, high and low calculations 15
(2) Price per share excludes contingent value right
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CAUTIONARY STATEMENT REGARDING FORWARD -LOOKING STATEMENTS
THESE MATERIALS CONTAIN CERTAIN FORWARD -LOOKING STATEMENTS. THESE FORWARD
-LOOKING STATEMENTS MAY BE IDENTIFIED BY WORDS SUCH AS "BELIEVES", "EXPECTS",
"ANTICIPATES", "PROJECTS", "INTENDS", "SHOULD", "SEEKS", "ESTIMATES", "FUTURE"
OR SIMILAR EXPRESSIONS OR BY DISCUSSION OF, AMONG OTHER THINGS, STRATEGY, GOALS,
PLANS OR INTENTIONS. VARIOUS FACTORS MAY CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY IN THE FUTURE FROM THOSE REFLECTED IN FORWARD -LOOKING STATEMENTS
CONTAINED IN THIS DOCUMENT, AMONG OTHERS: (1) ECONOMIC AND CURRENCY CONDITIONS;
(2) COMPETITIVE AND TECHNOLOGICAL FACTORS; AND (3) RISKS AND UNCERTAINTIES
RELATING TO THE PROPOSED TRANSACTION.
ADDITIONAL INFORMATION AND WHERE TO FIND IT
THESE MATERIALS ARE FOR INFORMATIONAL PURPOSES ONLY AND DO NOT CONSTITUTE AN
OFFER TO PURCHASE OR A SOLICITATION OF AN OFFER TO SELL ILLUMINA COMMON STOCK.
THE SOLICITATION AND OFFER TO BUY ILLUMINA COMMON STOCK WILL ONLY BE MADE
PURSUANT TO AN OFFER TO PURCHASE AND RELATED MATERIALS. INVESTORS AND SECURITY
HOLDERS ARE URGED TO READ THESE MATERIALS CAREFULLY WHEN THEY BECOME AVAILABLE
SINCE THEY WILL CONTAIN IMPORTANT INFORMATION, INCLUDING THE TERMS AND
CONDITIONS OF THE OFFER. THE OFFER TO PURCHASE AND RELATED MATERIALS WILL BE
FILED BY ROCHE WITH THE SECURITIES AND EXCHANGE COMMISSION (SEC), AND INVESTORS
AND SECURITY HOLDERS MAY OBTAIN A FREE COPY OF THESE MATERIALS (WHEN AVAILABLE)
AND OTHER DOCUMENTS FILED BY ROCHE WITH THE SEC AT THE WEBSITE MAINTAINED BY THE
SEC AT WWW. SEC.GOV. THE OFFER TO PURCHASE AND RELATED MATERIALS MAY ALSO BE
OBTAINED (WHEN AVAILABLE) FOR FREE BY CONTACTING THE INFORMATION AGENT FOR THE
TENDER OFFER, MACKENZIE PARTNERS, AT (212) 929-5500 OR (800) 322-2885
(TOLL-FREE).
ROCHE WILL BE FILING A PROXY STATEMENT ON SCHEDULE 14A AND OTHER RELEVANT
DOCUMENTS WITH THE SEC IN CONNECTION WITH ITS SOLICITATION OF PROXIES FOR THE
2012 ANNUAL MEETING OF ILLUMINA (THE "PROXY STATEMENT") . PROMPTLY AFTER FILING
A DEFINITIVE PROXY STATEMENT WITH THE SEC, ROCHE WILL MAIL THE PROXY STATEMENT
AND A PROXY CARD TO EACH ILLUMINA STOCKHOLDER ENTITLED TO VOTE AT THE 2012
ANNUAL MEETING. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY
STATEMENT CAREFULLY AND IN ITS ENTIRETY WHEN IT BECOMES AVAILABLE AND ANY OTHER
RELEVANT DOCUMENTS FILED WITH THE SEC BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION. INVESTORS AND SECURITY HOLDERS MAY OBTAIN A FREE COPY OF THESE
MATERIALS (WHEN AVAILABLE) AND OTHER DOCUMENTS FILED BY ROCHE WITH THE SEC AT
THE WEBSITE MAINTAINED BY THE SEC AT WWW. SEC.GOV. THE PROXY STATEMENT AND
RELATED MATERIALS MAY ALSO BE OBTAINED (WHEN AVAILABLE) FOR FREE BY CONTACTING
THE INFORMATION AGENT FOR THE TENDER OFFER, MACKENZIE PARTNERS, AT (212)
929-5500 OR (800) 322-2885 (TOLL-FREE).
ROCHE HOLDING LTD, CKH ACQUISITION CORPORATION AND THE INDIVIDUALS NOMINATED BY
CKH ACQUISITION CORPORATION FOR ELECTION TO ILLUMINA'S BOARD OF DIRECTORS (THE
"ROCHE NOMINEES") MAY BE DEEMED TO BE PARTICIPANTS IN THE SOLICITATION OF
PROXIES FROM ILLUMINA STOCKHOLDERS FOR USE AT THE 2012 ANNUAL MEETING OF
STOCKHOLDERS, OR AT ANY ADJOURNMENT OR POSTPONEMENT THEREOF. THE DIRECTORS AND
EXECUTIVE OFFICERS OF ROCHE HOLDING LTD AND CKH ACQUISITION CORPORATION WHO MAY
BE PARTICIPANTS IN THE SOLICITATION OF PROXIES HAVE NOT BEEN DETERMINED AS OF
THE DATE OF THESE MATERIALS. NO ADDITIONAL COMPENSATION WILL BE PAID TO SUCH
DIRECTORS AND EXECUTIVE OFFICERS FOR SUCH SERVICES. INVESTORS AND SECURITY
HOLDERS CAN OBTAIN ADDITIONAL INFORMATION REGARDING THE DIRECT AND INDIRECT
INTERESTS OF THE ROCHE NOMINEES AND OTHER PARTICIPANTS BY READING THE DEFINITIVE
PROXY STATEMENT WHEN IT BECOMES AVAILABLE.
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