Roche lowers Genentech bid to $42 billion

30 January 2009

Swiss drugmaker Roche Holding AG has lowered its offer price for the 44 per cent outstanding shares in Genentech to $86.50 per share, valuing it at $42 billion against its earlier bid totalling $44 billion.

Roche, which already owns 55.8 per cent of the Genentech, expects to commence the all-cash offer within two weeks.

The offer replaces the public proposal made by Roche on 21 July 2008 to acquire all of the publicly-held shares of Genentech at a price of $89 per share in cash by means of a negotiated merger (See: Roche confirms plans to acquire remaining 44 per cent in Genentech) 

After receiving Roche's original proposal, the board of directors of Genentech, with the full support of Roche, created a special committee comprised of independent directors to consider and respond to the Roche proposal. On 13 August 2008, the special committee announced its rejection of Roche's proposal (See: Genentech rejects Roche's $43.7-billion takeover offer as too low). In light of the lack of progress towards an agreed transaction since then, Roche has now decided to make an offer directly to Genentech shareholders, the company said in a website release.

''We intend to create unrivaled benefits for our patients, employees and shareholders by combining Roche and Genentech. We are disappointed that the discussions over the last six months between Roche and the special committee of Genentech have not produced a negotiated agreement. We feel it is now time to give the Genentech minority shareholders the opportunity to decide on our offer. Especially in the current market environment the offer provides an opportunity for all public shareholders to achieve liquidity and to receive a fair price for all their shares,'' Franz B Humer, chairman of the Roche Group, said commenting on the offer.

''This offer does not change our initial plan on how we combine the two companies and operate the new entity. We have great respect for our colleagues at Genentech and we will take the necessary steps to nurture Genentech's innovative and unique science-driven culture,'' added Severin Schwan, CEO of the Roche Group.