Genentech shareholders file lawsuit over Roche's proposed buyout

NEW YORK — A Genentech shareholder has filed a lawsuit on behalf of other Genentech investors concerning the company's proposed buyout by Roche, its majority shareholder, according to a press release from Cohen, Milstein, Hausfeld & Toll, legal counsel for the plaintiff.

The complaint, filed in the Court of Chancery in Delaware on Wednesday, alleges violations of breach of fiduciary duty and aiding and abetting breaches of fiduciary duty concerning Roche's offer to purchase the remaining shares of Genentech that it does not already own for $89 per share, for a total price of $43.7 billion, the release said.

Roche acquired a majority stake in Genentech in 1990 and currently owns 55.9% of all outstanding shares.

The complaint claims that Roche's proposal offers unfair and insufficient terms and has been timed to take advantage of "general market turmoil" as well as the weakened U.S. dollar. In addition, the suit claims that the proposed takeover is intended to position Roche to command a larger influence over Genentech's small molecule development and to provide Roche with more access to Genentech products after 2015.

The suit also alleges that based upon the control structure that Roche has over Genentech, Genentech's board of directors will be not be able to independently and adequately negotiate a fair deal, according to the release.

After Roche announced its buyout proposal earlier this week, Genentech's stock price rose more than 13% to $92.65, a sum that exceeds the proposed per-share price of the bid, according to the lawsuit.

If the proposed buyout is completed, Genentech will no longer be a publicly traded company.