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Genentech tells shareholders to reject hostile Roche bid
NEW YORK - Genentech Inc. on Monday urged shareholders to reject a US$42-billion hostile buyout bid from Swiss drugmaker Roche.
A Genentech committee said the offer is inadequate and not in the best interest of stockholders.
Roche owns 56 per cent of Genentech and is looking to buy the rest of the company for $86.50 per share. The deal would need support from a majority of the other shareholders.
Last July, Roche made a bid of $89 per share for South San Francisco-based Genentech, but was turned down. Genentech stock traded as high as $99.14 in 2008 in anticipation of an eventual deal. At the time, some analysts valued Genentech at $100 per share or more.
Genentech criticized Roche for failing to enter into constructive negotiations and confirmed in a filing with the U.S. Securities and Exchange Commission that it had sought a bid of $112 per share.
"We are disappointed that Roche has chosen not to consider an appropriate price range for Genentech's minority shares or to constructively negotiate with our committee, and we must recommend that stockholders not tender their shares as a result," the committee said in a statement.
The company also included in the SEC filing a letter from Goldman Sachs saying the investment bank had concluded the $86.50 offer undervalued Genentech.
Genentech's drugs include Avastin, which is approved to treat colon, lung, and breast cancer, and Rituxan for non-Hodgkin's lymphoma and rheumatoid arthritis.
Genentech shares rose 40 cents to $84.95 in aftermarket electronic trading, having closed earlier at $84.55.
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