Feb 23 2009
Genentech, Inc. has 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.