Roche Bid For Genentech Hits Snag: Reports

The deal is being held up by differing interpretations of a Securities and Exchange Commission rule.
Author:
Publish date:

Roche's

negotiations to acquire

Genentech

(DNA)

are being held up by a legal debate over how long Roche will have to leave its tender offer open to shareholders before completing the deal,

Bloomberg

reports, citing a person familiar with the matter.

If Roche raises its current bid of $45.7 billion, or $93 a share, by an amount acceptable to Genentech's board, it would have to leave its tender offer open for either 10 or 20 days, according to differing interpretations of

Securities and Exchange Commission

rules,

Bloomberg

reports.

A Genentech spokesman declined to comment for

Bloomberg

on whether there were talks with Roche, what the price might be or what SEC issues might be involved. A Roche spokeswoman also declined to comment.

The

Wall Street Journal

reports the snag is unlikely to derail the transaction, citing people familiar with the matter. The two camps were scrambling Wednesday to resolve the problem.

The two drug makers have agreed in principle on the terms of a deal that would value the 44% of Genentech that Roche doesn't already own at $46.7 billion, or $95 a share, according to the

Journal

.

Leaving the tender offer open for a longer period would create a problem for Roche, the

Journal

reports. It wants to sew up the deal before April, when a drug trial on Genentech's new cancer treatment, Avastin, is to be published, say people familiar with the matter. Roche is concerned that Genentech's shareholders would hold out for more money if the results are better than expected, the newspaper reports.