Roche proposal to be reviewed by Genentech special committee

South San Francisco-Genentech has formed a special committee of its board of directors to assess the proposal from Roche to acquire all of the outstanding shares of Genentech stock not owned by Roche at a price of $89 in cash per share. Roche is Genentech’s majority shareholder, owning more than 50% of the company.

The special committee members are Genentech’s three independent directors: Herbert W. Boyer, PhD; Debra L. Reed; and Charles A. Sanders, MD.

“The special committee intends to proceed in a timely manner to review the Roche proposal, which was both unsolicited and unexpected,” said Dr. Sanders, who also is the chairman of the special committee. “The outcome of this process has not been pre-determined, and there can be no assurance that the special committee will approve any transaction with Roche.”

Genentech’s board of directors has resolved that they will not recommend to stockholders or otherwise approve a merger or other business combination transaction with Roche without the prior favorable recommendation of the special committee.

Under the affiliation agreement between Genentech and Roche, neither Genentech nor the special committee has any obligation to agree to the transaction. The agreement also does not obligate Genentech or the special committee to agree to any specific process or any price based on valuation assessments provided by investment banks.

The offer was sent to Genentech’s three independent directors in July, and a prepared statement issued by Roche also outlined that Genentech’s unique research culture would be maintained, stating that the South San Francisco site would operate as an independent research and early development center and become the headquarters of the combined U.S. commercial operations.

In reaction to the proposed buyout, analysts have stated publicly that the price offered by Roche is inadequate and that they expect that Genentech is worth in excess of $100 per share.