Roche goes to court over Ventana''s poison-pill defence
05 July 2007
Swiss drug maker Roche Holding AG has gone to court in the US to get its hostile merger target, the US-based diagnostics group Ventana Medical Systems Inc's poison-pill defence provision that allows shareholders to buy new stock at half the price, struck down.
Roche is also challenging an Arizonan anti-takeover regulation that prevents a buyer from exercising voting rights to shares acquired during a hostile takeover.
In June Roche made an unsolicited $3-billion bid at $75 per share in cash to acquire Ventana after efforts to negotiate a friendly merger were rebuffed. (See: Roche makes hostile offer for Ventana) Roche's hostile offer is at a 45-per cent premium to the Ventana's stock the day Roche announced the offer.
Roche says the Arizona law violates the constitutional guarantees on the free movement of capital between states. The law, which the Arizona Republic newspaper said was enacted in 1987 at the behest of the Greyhound Corp, would require Roche to obtain shareholder approval to exercise the voting rights acquired during a hostile offer.
The Swiss giant hopes to force Ventana to discard its poison pill bylaws. Although Ventana's corporate offices are in Arizona, the company is legally based in the East Coast state of Delaware for tax reasons. Ventana's regulations allow shareholders to buy new, half-price shares if anyone acquires 20 per cent or more of the group without consent.
Roche has already said it have to comabt the poison pill rules before the deal could move forward.