Roche has ways to limit Genentech price

The Roche offer for Genentech is still reverberating through the news today, spawning all sorts of price speculation and predictions about Genentech's probable future if owned outright by the Swiss drugmaker. One story caught our eye, though, because of the widespread feeling that Roche will have to raise its bid [1]--from $89 a share, a 9 percent premium--to nab the share of Genentech it doesn't already own.

The fact is that Roche has some protections built in to its original acquisition of 56 percent of its target. According to the Wall Street Journal Health Blog, Roche can keep other companies from getting into the game with higher offers--which would prevent a costly bidding war. Also, if Genentech's other shareholders nix the $89-a-share offer, Roche has the right to hire investment bankers to assign an acquisition price, and then go ahead with the deal without shareholder OK.

- see the WSJ Health Blog post [2]

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Genentech - Big Biotech's Stock Report [4]
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Roche suffers as big drugs falter [6]
Genentech explores biologics, small molecules [7]