No surprise here: Genentech's special committee gave a thumbs-down to Roche's new, lower offer for the 44 percent of shares it doesn't already own. The gist? Great deal for Roche, bad deal for the other shareholders, the committee said.
"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," Dr. Charles Sanders, chair of the special committee, wrote, "and we must recommend that stockholders not tender their shares as a result."
Roche has said that the stock market turmoil justified its lower offer of $86.50 per share, rather than the $89 it bid last year. As you know, Genentech had come back with a $112 asking price.
Analysts do expect Roche to boost its bid, but not nearly to $112. The company has an interest in wrapping up a deal before April, when data on expanded use of Genentech's cancer med Avastin might send shares soaring. "[Shareholders] are laughing at [the $86.50] offer," Sven Borho, an investment manager with a stake in Genentech, told the San Francisco Chronicle. "If they sweeten the deal to $95 befor the [Avastin] data, a tender offer could be successful."
- read the Chronicle story