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Ventana Scoffs at Roche's Second Bid Extension; US Court OKs Request to Block 'Anti-Takeover Provisions'

NEW YORK (GenomeWeb News) — Roche late yesterday said it has extended the deadline for its $3 billion hostile bid to buy Ventana Medical Systems by almost one month, and Ventana officials quickly responded that the offer remains “wholly inadequate.”
 
Separately today, Roche said that a US District Court granted its request to prevent Ventana from triggering certain “anti-takeover provisions” aimed at killing Roche’s hostile bid.
 
Roche issued a statement after the close of business yesterday saying it has extended its tender offer to 5:00 p.m. EST on Sept. 20 from Aug. 23, which itself was extended from July 27. All other terms and conditions of the offer remain unchanged, Roche said.
 
As of the close of business on Aug. 21, approximately 13,430 shares have been tendered, the Swiss giant added. The company has around 34 million shares outstanding, according to the Nasdaq exchange.
 
Ventana’s board remained unmoved. Less than 40 minutes after Roche disclosed the second extension, Ventana called the offer “wholly inadequate” and said its board “continues to recommend that stockholders not tender” any of their shares.
 
“Roche's offer remains significantly below our current stock price, even with the recent tumultuous market conditions, proving that the market agrees that the offer fails to reflect the inherent value of the company, its steady growth momentum, and the magnitude of the synergies that would be unlocked in a combination with Roche,” Ventana said in its statement.
 
As part of its hostile bid Roche has challenged an Arizona state law that would prevent the firm from exercising control over Ventana if it gains a majority stake.
 
Today, the US District Court for the District of Arizona granted Roche's motion for a preliminary injunction barring Ventana from “taking action to apply or enforce certain anti-takeover provisions … with respect to Roche or Roche's tender offer to purchase all outstanding shares of common stock of Ventana.”
 
Roche had also filed suit in Delaware to remove Ventana’s “poison pill” defense, which would dilute Roche’s holdings if it tries to buy more than 20 percent of the company.
 
Roche originally disclosed its plans to take over Ventana in late June. The company said it would pay around $3 billion, or $75 per share, for Ventana, which represented a 45-percent increase over Ventana’s closing price the day before the announcement.
 
According to Roche, Ventana, a tissue-based diagnostics company based in Tucson, Ariz., would enable Roche to “broaden its diagnostic offerings” and complement its in vitro diagnostics and cancer therapies.
 
Roche said the $1 billion tissue-based testing market is growing at 10 percent a year, or twice the rate of the overall in vitro diagnostics market. Key growth drivers in this market include test automation and standardization, the increasing incidence of cancer, and the increasing number of targeted cancer drugs requiring companion diagnostics, Roche said.
 
One product that Ventana sells and that could help Roche is a test that screens patients likely to respond to the targeted breast cancer drug Herceptin, which is Roche’s second-largest seller.

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