Genentech Special Committee Rejects Roche’s $86.50 Offer As Inadequate

February 24, 2009 at 2:00 pm Leave a comment


Genentech, Inc. (NYSE:DNA) announced that a Special Committee of its Board of Directors unanimously recommended that shareholders reject the unilateral tender offer from Roche to acquire all of the outstanding shares of Genentech not owned by Roche for $86.50 cash per share. The Special Committee, after a thorough review with its independent financial and legal advisors, determined that the offer was inadequate and not in the best interests of stockholders, other than Roche and its affiliates.



The Special Committee unanimously recommends that stockholders not tender their shares into Roche’s offer.




“Genentech’s strong projected financial performance implies a valuation substantially in excess of Roche’s offer price,” said Dr. Charles Sanders, Chairman of the Special Committee of Genentech’s Board of Directors. “Our belief in the 2008 Financial Plan stems from the rigor with which it was prepared and updated over a period of more than six months and its neutral stance, being neither conservative nor aggressive. We believe the Plan’s projections are further validated by Genentech’s remarkable past achievements and the strength of its unparalleled research and development organization, its robust and promising product pipeline, and its industry-leading commercial and financial success. We believe Genentech’s exceptional management and team, including its world-renowned scientists, can create far more value for stockholders than Roche has offered. Genentech’s track record of industry-leading financial results supports our confidence in its future.”




Dr. Sanders added, “Over the past seven months, the Special Committee persistently attempted to work constructively with Roche and we were consistent in our stated willingness to negotiate toward a price that recognizes the full value of Genentech and reflects the significant benefits Roche would enjoy as a result of full ownership. Even after all our efforts, and despite the acknowledgement of additional value as reflected in its advisors’ analyses, Roche refused to increase its original $89 proposal and to engage in productive negotiations with the Special Committee regarding a mutually acceptable valuation. Instead, Roche reduced its offer price to $86.50, a price – like the original $89 offer – that we believe substantially undervalues Genentech. We are disappointed that Roche has chosen not to consider an appropriate price range for Genentech’s minority shares or to constructively negotiate with our Committee, and we must recommend that stockholders not tender their shares as a result.”




Stockholders with questions about the Special Committee’s recommendation or how to withdraw any tender of their shares may call Genentech’s information agent, Innisfree M&A Incorporated, toll-free at 877-750-9499. (Banks and Brokers may call Innisfree collect at 212-750-5833.)




The basis for the Special Committee’s recommendation is set forth in Genentech’s Schedule 14D-9, which was filed today with the Securities and Exchange Commission, accompanied by a letter to stockholders. The full text of the letter is attached to this release.



About Genentech




Founded more than 30 years ago, Genentech is a leading biotechnology company that discovers, develops, manufactures and commercializes medicines to treat patients with significant unmet medical needs. The company has headquarters in South San Francisco, California and is listed on the New York Stock Exchange under the symbol DNA. For additional information about the company, please visit http://www.gene.com.



Important Legal Information




In connection with the tender offer commenced by Roche Investments USA Inc. and Roche Holding Ltd (“Roche”), the Company has filed with the Securities Exchange Commission a Solicitation/Recommendation Statement on Schedule 14D-9. The Company’s stockholders should read carefully the Solicitation/Recommendation Statement on Schedule 14D-9 (including any amendments or supplements thereto) prior to making any decisions with respect to Roche’s tender offer because it contains important information. Free copies of the Solicitation/Recommendation Statement on Schedule 14D-9 and the related amendments or supplements thereto that the Company has filed with the SEC are available at the SEC’s website at http://www.sec.gov.



Cautionary Note Regarding Forward-Looking Statements




This press release contains forward-looking statements regarding Genentech’s future financial and operating results and other statements regarding Genentech’s intentions, beliefs, expectations, plans, prospects, or predictions for the future. These forward-looking statements are based on Genentech’s opinions and estimates and involve risks and uncertainties, and the cautionary statements set forth below and those contained in “Risk Factors” in Genentech’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008 identify important factors that could cause Genentech’s actual results to differ materially from those predicted in any such forward-looking statements. Such factors include, but are not limited to, Genentech’s inability to execute its 2008 Financial Plan; regulatory actions or delays; failure to obtain or maintain, or changes to, FDA or other approvals; difficulty in obtaining materials from suppliers; unexpected safety, efficacy or manufacturing issues for Genentech or its contract/collaborator manufacturers; difficulty in enrolling patients in clinical trials; the need for additional data, data analysis or clinical studies; biologic license application (BLA) preparation and decision making; increased capital expenditures, including greater than expected construction and validation costs; product withdrawals or suspensions; competition; efficacy data concerning any of Genentech’s products which shows or is perceived to show similar or improved treatment benefit at a lower dose or shorter duration of therapy; pricing decisions by Genentech or its competitors; Genentech’s ability to protect its proprietary rights; the outcome of, and expenses associated with, litigation or legal settlements; variations in collaborator sales and expenses; Genentech’s indebtedness and ability to pay its indebtedness; fluctuations in contract revenue and royalties; actions by Roche that are adverse to Genentech’s interests; the outcome of, or developments concerning, Roche’s tender offer; decreases in third-party reimbursement rates; greater than expected income tax rate; current macro-economic and financial market conditions; the ability of wholesalers to effectively distribute Genentech’s products; inventory write-offs and increased cost of sales; changes in accounting or tax laws or the application or interpretation of those laws; increased R&D, marketing, general and administrative, stock-based compensation, environmental and other expenses; and the outcome of any litigation related to the initial $89.00 Roche proposal, Roche’s tender offer or the Special Committee’s recommendation to stockholders.



Genentech

[Via http://www.medicalnewstoday.com]

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