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Home Industry News Roche bid ‘undervalues Genentech’

Roche bid ‘undervalues Genentech’

15th August 2008

The board of directors of biotechnology firm Genentech has said the recent offer from Roche to acquire the shares of the business the company does not yet own “substantially undervalues” the company.

Roche has made an offer of $89 (47.8 pounds) per share for the outstanding stock of Genentech.

The special committee said it does not support this proposal, though it would consider a revised proposal which recognises the value of Genentech and the “significant” benefits available to Roche if it moved to a position of full ownership of the company.

Dr Charles A Sanders, chairman of the special committee, said, “The special committee is confident in the company’s strong financial and clinical momentum and its uniquely productive research and development capabilities, which will continue to enhance shareholder value.”

He added the company looks forward to continuing its partnership with Roche, irrespective of any changes in the ownership structure between the firms.

Furthermore, the committee approved the implementation of a broad-based employee retention programme to deal with any concerns of staff regarding the offer from Roche.

A survey of analysts at Reuters forecasts Roche will consequently increase its offer to purchase the remaining 21 per cent of Genentech to $53 billion.

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