Genentech’s special committee formed to help the Board of Directors pose a response to the Roche purchase proposal has stated that they feel the offer "substantially undervalues" the company, but left open the door for a new bid. Here is the entire press release.
|Genentech Special Committee of Independent Directors Responds to Roche Proposal|
|South San Francisco, Calif. — August 13, 2008 — The special committee of the Board of Directors of Genentech, Inc. (NYSE: DNA) announced that, after careful consideration, it has unanimously concluded that Roche’s proposal to acquire the shares of Genentech not owned by Roche for $89.00 per share substantially undervalues the company. Therefore, the special committee does not support the proposal. However, the special committee would consider a proposal that recognizes the value of the company and reflects the significant benefits that would accrue to Roche as a result of full ownership.
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 R&D capabilities, which will continue to enhance shareholder value. In addition, we look forward to the company maintaining its successful relationship with Roche, regardless of ownership structure."
In light of the tremendous importance of Genentech’s employees to the company’s success, the special committee has approved the implementation of a broad-based employee retention program to address any employee concerns created by the Roche proposal. Genentech’s Board of Directors, including the Roche representatives, had previously granted the special committee authority to implement such a program.
It would seem both sides are responding according to their playbook. One need only look at Roche’s last testy acquisition of Ventana Medical Systems just months ago to understand how this process will most likely play out in the coming months.
It’s an intricate dance that still culminates with the intended conclusion of Roche getting their way.