It Will Take Much More to Buy Genentech (DNA)
The Board of Directors of Genentech, Inc. (NYSE: DNA) had already appointed a special committee to review the $89.00 cash buyout for the rest of the company that Roche did not already own. The committee responded today with a “NO, WE WANT MORE!” response to Roche.
In the press release, it announced that it has unanimously concluded that Roche’s proposal to acquire Genentech for $89.00 per share substantially undervalues the company and the special committee does not support the current proposal.
If you read the release, you can see they are demanding more cash to take the stock out.
- “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.”
If you’d like our prediction, we are happy to give it. We think that the company is willing to be acquired, but a price of $99 to $106 is what the buyout will take to complete. But if Genentech says that it will not play at those levels then roche may threaten to unload a larger portion of the stock.
Jon C. Ogg
August 13, 2008
