DOW JONES NEWSWIRES
Independent board members at Genentech Inc. (DNA) again rejected
the proposal from Roche Holding AG (RHHBY) to buy the 44% of stock
the Swiss drug giant doesn't already own, saying the offer
undervalues the biotechnology giant.
The reaction isn't a surprise, as Roche cut the offer last month
by 2.8% to $86.50 a share, or nearly $40 billion. It also comes as
a special board committee was looking for $112 a share after the
initial bid of $89 was made. The committee subsequently said the
first offer substantially undervalued Genentech.
"Genentech's strong projected financial performance implies a
valuation substantially in excess of Roche's offer price," Dr.
Charles Sanders, the committee's chairman, said Monday. He added
the company's "exceptional management and team, including its world
renowned scientists, can create far more value for stockholders
than Roche has offered."
Roche is taking its bid for the outstanding Genentech stake to
the company's shareholders and has said it would exercise its
option to have a majority of seats on Genentech's board.
It has also been busy in the debt markets raising money to avoid
having to borrow from banks. Roche last week sold a record $16
billion in bonds to help finance the hostile takeover. That cash,
though, could also boost the chances that Roche might ultimately
raise the offer to cement shareholder approval.
Genentech shares closed Monday at $84.55 and rose to $84.60 in
after-hours trading.
-By Kevin Kingsbury, Dow Jones Newswires; 201-938-2136;
kevin.kingsbury@dowjones.com