Roche has raised its hostile bid offer for Genentech to $93 (£66.35) per share, boosting the total offer value to $45.7 (£32.6) billion.
The Swiss drug developer says it has raised $36 (£25.7) billion through debt offerings, and the rest of the funding will come through debt financing and cash.
Chairman Franz Humer says : “We believe that there is a strong sentiment to bring this process to a conclusion. As a result, we are increasing our price to maximise shareholder participation, and will proceed quickly to complete all necessary financing.”
Genentech has been briefing analysts to back up its claim that the company is worth more than the Roche offer – up to $112 (£79.9) per share.
Much depends on the company’s Avastin colon-cancer drug, which has been approved and is the company’s best-selling product. If the latest study is successful, the share price will probably rise.
Meanwhile, BMO Capital Markets analyst Jason Zhang says it is too early to tell how many shareholders the new bid will win over, but he is more neutral on the boosted bid. He had previously recommended against the prior bid.
He says: “After thoroughly studying Genentech’s research and development presentation, we do not think the new bid captures Genentech’s long-term value.”
Copyright Press Association 2009