Roche’s hostile $3 billion bid to acquire the US diagnostics firm Ventana Medical Systems has been met with an equally hostile response with the latter’s board rejecting it unanimously.
The board stated that the $75-per-share offer "is inadequate in multiple respects and contrary to the best interests of Ventana's stockholders". Chairman Jack Schuler said that “simply put, we believe that Roche is trying to capture value for its stockholders that rightly belongs to Ventana's stockholders”, while chief executive Christopher Gleeson left no doubt as to what he thinks of the offer.
He said that it “does not come close to adequately compensating Ventana stockholders for the accelerating momentum of our business”, adding that the firm “has a unique position in the market and we will continue to articulate this platform and plan for enhancing value in the weeks ahead." He then said that “Roche's public disclosures to date are attempts to deliberately mislead the market as to our prior interactions and contacts”.
Although Roche's overtures “were vague at best, our board carefully analysed and considered them,” Mr Gleeson said, “and any inference otherwise is simply misleading and inaccurate”.
However he accuses Roche of not waiting for Ventana’s response before launching its hostile bid and commencing litigation. “We can only attribute this to high-handed tactics being used in an effort to deprive our stockholders of fair value,” he said, stating that “negotiating at these levels is a non-starter".
Roche accused of ‘high-handed tactics’
The board also made public a letter sent to Roche chairman Franz Humer, which says that “we have a serious concern that, to some significant extent, your interest in our company may be based upon confidential information shared with you or your affiliates for collaborative purposes. At a minimum, that indicates a serious breach of our trust”. Ventana also says that this point, “together with your high-handed tactics, will no doubt serve as a cautionary tale to those with whom you may seek to do business in the future”.
Strong words indeed, and Roche responded immediately. Mr Humer said his firm’s bid is “a full and fair offer and a unique opportunity for Ventana’s stockholders to receive value now” that reflects its “current business and full future potential”. Roche added that its preference is to enter into a negotiated transaction but will also “consider taking action in connection with Ventana’s 2008 annual meeting”. This could include the nomination of new directors to the latter’s board and it looks like the battle for the Tucson, Arizona-based firm is likely to get nasty.