Genentech asks shareholders to sit tight on lower Roche bid

Genentech is urging its shareholders to take no action just yet regarding the hostile takeover bid launched last week by its majority stakeholder Roche.

Roche decided to go hostile with a $42 billion, or $86.50 per share, bid for the 44.2% stake that it does not already own in the US biotechnology giant. The offer replaces the $89 per share bid made by the Swiss major in July which was rejected by Genentech’s independent directors as being inadequate.

Now a special committee of the Genentech board has responded to the latest unsolicited bid by asking shareholders “to take no action at this time”. The three committee members said they intended to “take a formal position regarding the Roche offer within ten business days”.

The committee noted that it will then “explain in detail its reasons for that position” by filing a statement with the US Securities and Exchange Commission.

Last week, Roche said that the offer was a fair one and the Basel-based group now needs to acquire 90% of Genentech in order to complete a merger. If it fails, Roche has said it will review its options, which could involve sitting tight or purchasing shares through privately-negotiated deals.