The Work

January 30, 2009 12:35 PM

Davis Polk, Latham on Roche's Hostile Bid for Genenetch

Posted by Zach Lowe

In July the Swiss pharma giant Roche offered about $44 billion for the stake of U.S. rival Genentech it doesn't already own, and the price so insulted some Genentech shareholders that they filed a lawsuit against both companies seeking to block the deal

Genentech eventually rejected the Roche offer, so now Roche has come back today with a hostile bid--for $42 billion, or some $2 billion less than its initial offer. The new bid values Genentech at about $86 per share, a 3 percent premium over its Thursday closing price.

Steven Toll, name partner at Cohen Milstein Sellers & Toll and the lawyer who filed the suit, did not immediately return a call seeking comment about the new bid. (The suit is pending in U.S. Chancery Court in Delaware.) 

Like Pfizer, which on Monday announced plans to purchase Wyeth in a $68 billion megadeal, Roche would surely expand its drug pipeline by gaining full control over Genentech's portfolio, including the cancer treatment drugs Avastin and Herceptin, Reuters says. (Several insiders told Reuters they believe Genentech's shareholders would pass on the Roche offer.)

Davis Polk & Wardwell is advising Roche in the talks. Corporate partner Arthur Golden is leading the firm's team along with partners Christopher Mayer and John Butler (corporate), litigation partner Lawrence Portnoy, antitrust partner Ronan Harty, tax partner Michael Mollerus, employment partner Jean McLoughlin and regulatory partner Margaret Ayres.

Golden says the firm has been advising Roche for about 20 years, and they represented Roche when it first acquired a majority stake in Genentech in 1990.

Latham & Watkins is advising a special committee of independent Genentech directors that was formed last summer when Roche made its first offer, says Charles Nathan, cohead of Latham's M&A practice. The other lead partners on the deal are Peter Kerman, Paul Dawes and John Newell. The firm could not offer further comment on the deal.

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