Surprise, surprise. Genentech's
Here's a quick review of the soap opera that's taken place over the last seven months.
Date |
Event |
Stock Movement |
---|---|---|
July 21, 2008 |
Roche offers $89 per share. |
Shares jump to more than $93. |
August 13, 2008 |
Genentech rejects the offer, but it's willing to negotiate. |
Shares have moved to $98 and stay there through August. |
August 2008 - December 2008 |
Nothing -- not a good thing for investors in M&A deals. |
Shares slide as low as $70 on worries that Roche won't be able to get financing. Note to Roche: Next time, set up your financing ahead of time like Pfizer |
January 30, 2009 |
Roche plays hardball with a $86.50-per-share tender offer to shareholders. |
Shareholders still don't think it'll get done, as shares hover around $82. |
February 9, 2009 |
Roche launches tender offer and claims Genentech wants $112 per share. |
Genentech driving a hard bargain doesn't impress shareholders, and the stock still trades for far less than $86. |
Genentech is like a rebellious teen that Roche should have never let out of its grasp in the first place.
What's next?
I think it's likely that Genetech will wed Roche's first wife, who also happens to be Genentech's sister-in-law.
In all seriousness, I have no idea when the soap opera will end. It seems unlikely that investors will turn over their shares for $86.50, if the company they're invested in thinks the shares are worth more than $100. But then again, that would still be a premium on what investors could get in the open market right now.
It's hard for Genentech to prove its worth with only one bidder; at least Carl Icahn could bust out Eli Lilly's
It seems like this potential merger could drag on as long as the Sirius XM Radio
The same outcome seems likely here. The only question is whether Genentech's teen angst will keep the drugmakers from coming to a deal between $86.50 and $112.
Pull up a chair -- here's more Foolishness on never-ending sagas: