Roche's cache of cash is growing. The Swiss drugmaker raised another $14 billion in bonds, this time on the U.K. and European markets. That follows a $16 billion issue in the U.S. last week. With $30 billion available, Roche is now three-fourths of the way to the $40 billion it needs to complete its $86.50 a share buyout of Genentech.
There's a catch, of course: Genentech has rejected that bid as too low (and it's obviously lower than Roche's initial $89 offer, made last year). Analysts have been predicting that Roche, which owns some 56 percent of Genentech already, will have to sweeten its offer to get the other shareholders to go along. The markets seem to agree: Genentech shares rose 1.1 percent yesterday to $86.42--and had reached an intraday high of $89.
According to the Wall Street Journal, Roche had about $14 billion in cash before it started issuing bonds, and has said it can raise another $10 billion by selling commercial paper. That would make a grand total of $54 billion. Plenty of money to allow a bid in the mid-90s per share. Stay tuned.
- read the WSJ story