Genentech says Roche offer undervalues the firm

As has been widely expected, US biotechnology giant Genentech has turned down the offer from majority shareholder, Swiss drug major Roche, to acquire the 44% of the firm it does not already own for $89 a share, or a total of around $43.7 billion (Marketletter July 28. The US firm's shares were already trading in the $98 range ahead of this latest announcement.

Genentech's special committee of the board of directors said 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."