Roche Pharmaceuticals initiated a hostile takeover of the company I work for, Genentech. I have a few choice words for Roche, but I should not say write them here in case children read this.

We will see in the next few weeks what it will mean. I guess I am not going to get that new TV I've been wanting. I guess the 18 year old one is doing fine.

 

damn stick to ur guns y do they want ur company

 

Thanks. I am not selling my shares.

They want us because we are very profitable and have some great things in our product pipeline.

 

Takeovers can be a nightmare, I went tghrough one in the mid-80's with my first company (luckily we were the ones doing the takeover), IIRC, first guys to go were the highest on the foodchain.

 

I am glad then that I am slightly higher than whale poop in the company.

 

that helps

 

Pardon my ignorance, but how does a company just "Take over" another company?

 

Here is the story with my company. Genentech is a publicly traded company (stock symbol DNA). Roche Pharma owns 56% of Genentech. They want to own all of it and make it a privately held part of Roche. By doing so, they get all our products, profits, cash reserves, and the big money maker- our future product pipeline.

In July 2007, they made an offer to buy the remaining shares (44%) by paying an extra $8 per share premium. An independent board (not hired by Genentech or Roche) that represents the minority stockholders (the other 44% of us who own stocks) decided that even at the$8 per share (about 11% extra) undervalued Genentech. If the independent board had said yes, then the stock holders would sell all their shares to Roche at a total cost of around $40 billion.

As we all know, the economy tanked since then. Genentech's stock has remained about level though during that time. The dollar got weaker compared to the Swiss franc and the Euro, so it would cost them more money to buy us. We were left in limbo since early August waiting to see what Roche would do next.

On Friday, they said they will go straight to the share holders within the next few weeks and make the offer directly to them to pay a $6 per share premium and buy out the company. If enough share holders sell to give Roche a %90 holding, they then can force a merger and take over Genentech. This is an over-simplification of the process, but it kind of summarizes it.

Roche would need about $30 billion in loans to do this. They do not have the full financial backing yet to back their offer. Last week, Pfizer bought Wyeth pharma for $60 billion with major loans. Maybe that gave Roche hope that they could get the financing to buy the rest of Genentech.

I also think that Roche is looking at Genentech's drug pipeline and sees that they have to buy now. In April, Genentech will be releasing clinical study results on a major drug. If the results are good, the stock could go up %30 in a few days. If the results are bad, it could go down 15-20% or more in a few days. Roche knows that if they don't act now and the news about the drug is good, they will not be able to buy the rest of us. Now, I should make a disclaimer. I work for Genentech and this paragraph is just my amateur analysis and may be missing lots of key info.

I've worked at Genentech for almost 10 years and love the company. I would hate to see a great place that does great work disappear to just make another company a quick dollar, then be torn apart and disappear.

I will now get off of my soap box.

 

The big guy swallowing up the little guy. Hmm, sounds oh so familiar. (

 

Sorry to hear about that Karl. Roche is a huge multi-national company that has no soul. I have some friends that work at Genentech and love it as well. The thought of Roche taking over Genentech is saddening.