Roche has apparently capitulated in its fight to take over Genentech Inc. (NYSE: DNA). Its cancer franchise and its pipeline, along with a shareholder proxy fight, finally made Roche tip its hand. The company’s $86.50 tender offer, which was lowered already, was raised to $93.00 tender offer.
The offer’s deadline has been extended to midnight on March 20. Shareholders have to agree to the deal, which is subject to the original conditions. The company has raised $36 billion in capital and Roche says in an SEC filing that it can raise the rest.
As of March 5, Roche said that only about 500,000 shares have been tendered in favor of the offer. Many still feel that Genentech is worth more than $100 per share. But this is a bird in the hand in a very tough climate. This new offer might represent much more than two birds in the bush.
Genentech shares are now trading up 10% at $89.90 on the news.
Jon C. Ogg
March 6, 2009