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Chugai Denies Talk of Roche Bid, but Market Unconvinced

NEW YORK (The Deal) -- Despite a denial from the target and silence from the potential suitor, shares of Japanese drug company Chugai Pharmaceutical continue to climb as investors bet on the years-long consolidation of global drugmakers.

Chugai's stock gained 15.4%, or ¥510, to ¥3,825 Monday, amid reports majority owner Roche Holding (RHHBY) , the Swiss oncology giant, hopes to soon take the company private with a $10 billion approach. Chugai is now worth ¥2.14 trillion ($20.9 billion), though Roche has a 62% stake.

"Chugai is in no way in the process of reviewing any plan to become a wholly-owned subsidiary of Roche, nor discussing with Roche about such a transaction. Roche, as usual, is not commenting on any market rumors," Chugai said in a brief statement.

True to Chugai's word, Roche refused to comment.

Investors believe in the deal despite the deflections because drug companies around the world, including Roche, have been in a dealmaking mood for years. In just the last two months Roche itself has agreed to buy former Aragon Pharmaceuticals unit Seragon Pharmaceuticals, of San Diego, and Copenhagen-based Santaris Pharma for as much as $425 million.

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