From Baron Funds' first quarter letter: In January, the Swiss pharmaceutical giant, Roche Holding AG (ROCM
), made an all cash offer to acquire Illumina, Inc. (ILMN
) for $44.50 per share. While the stock contributed 110 basis points to our performance, we were less than thrilled with Roche's hostilities, firstly, because we thought the offer meaningfully undervalued Illumina's long term opportunities, and secondly, because we did not get a chance to build a full position. Illumina's Board of Directors has decided to fight the takeover at this price, which we believe is the correct course of action, and hence, we will not tender our shares. There is a good deal of uncertainty in this situation as Roche (or someone else) could offer a significantly higher price or the takeover could collapse all together. Should Roche walk away and no other bidder emerge, there is likely some downside to the stock, and we may get another chance at acquiring a full position. In any event, we will likely be discussing Illumina in our future letters.