Genentech urges shareholders to reject Roche bid
pharmafile | February 24, 2009 | News story | Sales and Marketing |Â Â Genentech, RocheÂ
The battle for the future of Genentech has heated up after the company's board asked its shareholders to reject Roche's latest takeover bid.
Roche already holds a significant share in the Californian biotech company, but is looking to buy out the remaining shares and merge it into the larger Roche group.
The Swiss pharma company is now offering $86.50 cash per share – actually lower than its original 'friendly' takeover bid – and Genentech's board say the bid should be refused.
"Genentech's strong projected financial performance implies a valuation substantially in excess of Roche's offer price," said Dr Charles Sanders, chairman of the special committee of Genentech's Board of Directors.
He added: "We believe Genentech's exceptional management and team, including its world-renowned scientists, can create far more value for stockholders than Roche has offered. Genentech's track record of industry-leading financial results supports our confidence in its future."
Dr Sanders said the company's board had tried to 'work constructively' with Roche, but that Roche had failed to improve on its original offer of $89 cash per share.
Roche maintain that if its second offer is rejected then a third party can be called in to make a valuation and then compel Genentech to sell at this price. Genentech, however, says it is not bound by this agreement.
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