Roche sweetens pot to nab Ventana

After repeated attempts and after being repeatedly rebuffed by Ventana Medical Systems management in its attempt to acquire the company, Roche

Chris Anderson
TUCSON, Ariz.-After repeated attempts and after being repeatedly rebuffed by Ventana Medical Systems management in its attempt to acquire the company, Roche yesterday finally got the yes answer it was hoping for, but only after increasing its per share offer for the company by nearly 20 percent.
 
By raising its bid to $89.50 per share Roche finally turned the head of Ventana and its long sought after target.
 
This saga stretches back to June, when Roche first made an unsolicited bid to buy Ventana for $75 a share or roughly $3 billion. At that time, Ventana shares were trading for just north of $50 per share, which, on the surface, looked like an attractive offer. But Ventana's management was insistent that both Roche and the market had misjudged the real value of the medical diagnostics company and successfully lobbied investors not to tender their shares. Roche, reportedly, resorted to the hostile takeover route since other advances for an acquisition earlier in the year were similarly rebuffed.
 
In an article published in Forbes.com in July, Ventana Chairman Jack Shuler said of the offer: "This is about stockholder value. Simply put, we believe that Roche is trying to Ventana shares rocketed more than 50 percent in the first day of trading after Roche's June bid, and its performance since then has done nothing but justify Ventana's posture, as the stock climbed steadily through the remainder of 2007, hitting a 52-week high of $90.25 in November."
 
Roche, meanwhile, kept extending the tender offer through the remainder of the year, though as the stock continued to climb it seemed dubious they would get the deal done for the original bid.
 
The persistence by the company, however, showed how serious they were in adding Ventana to its stable—and for good reason. Ventana's strong position in the histopathology market provides Roche with an instant presence in this market. Further, the tissue diagnostics in Ventana's portfolio can be leveraged as both companion diagnostics for existing and developing drugs at Roche, as well as provide a means by which Roche can provide therapies that are more directly targeted to individuals based on patient response to treatments.

Chris Anderson

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