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With news of the Merck/Schering-Plough merger, Roche (RHHBY) is nearing a deal with Genentech's (NYSE: DNA) board that would give Roche the remaining 44% of Genentech that it doesn't already own. Reports from the Wall Street Journal suggest that the two companies may have been close to a deal Monday afternoon, with timing and closing conditions yet to be agreed upon. In fact, the Journal noted that these terms could cause the deal to fall apart. Roche is offering $95 per share for the remaining Genentech's shares, up from Friday's offer of $93 per share, which was already higher than the earlier offer of $86.50 per share. Reportedly, Genentech's board has pegged the company's worth at $112 per share. However, Roche's chairman noted that this price is not realistic, stating the firm's current offer is still fair.
The reports sent the stock higher Monday, with Genentech flirting with the $92.50 region. That said, Roche has publicly proclaimed exactly what it thinks Genentech is worth. This is a tough situation for any stock, as the Street now knows what another firm believes it is worth. I can't imagine that too many investors will run out and pay $112 per share for Genentech when odds are Roche will pay little more than $95 per share.
Robert W. Baird cut Genentech to Neutral from Outperforrm.
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Reader Comments (Page 1 of 1)
3-11-2009 @ 2:15PM
rennelsranch said...
Hope the buy out DOES NOT take place. Don't like the idea of Roche putting more people out of work as I believe they've said that they will eliminate duplicate positions.
Do we really need more joblessness????????