Global Investing

What will Roche end up paying for Genentech?

July 25, 2008

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The first lawsuits are flying but Roche’s experienced dealmakers are unlikely to put more cash on the table just yet.

While it seems clear $89 a share won’t do it – the market has already pushed Genentech stock to $95 and some analysts are talking well over $100 – the Basel-based drugs giant can afford to bide its time. With 56 percent of the biotech company already in his pocket, Chairman Franz Humer is ready to play a long game.

Genentech, which says Roche’s bid for the remaining 44 percent is “unsolicited and unexpected”, has formed a special committee of its three independent directors to assess the proposal. They will be engaging outside advisors, suggesting a lengthy process ahead. 

At the end of the day, most analysts believe a deal looks inevitable and Roche will end up sweetening its current $43.7 billion offer.

 The question is, by how much?

Comments
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$95 a share seems like a long way off in today’s market. Any acquisition should have been delayed until the price had collapsed. Genetics companies have fluxuated in price during times of stock market uncertainty

 

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