Genentech committee rejects amended buyout proposal

SOUTH SAN FRANCISCO, Calif. — A special committee of Genentech's board of directors has unanimously recommended that shareholders reject the unilateral tender offer made by Roche earlier this month to acquire all of the company's outstanding stock that it does not currently own at a cash price of $86.50 per share.

After a review by independent financial and legal advisers, the special committee has deemed Roche's offer inadequate and maintains that accepting the offer would not be in the best interests of Genentech's stockholders, except for those from Roche and its affiliates, according to a press release from Genentech.

"Over the past 7 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," Charles A. Sanders, MD, chairman of the special committee, said in the release.

"Even after all our efforts, and despite the acknowledgement of additional value as reflected in its advisers' 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," he said.