Ventana Medical Systems has rejected Roche’s $3-billion unsolicited offer to acquire the company. It recommends that stockholders not tender any of their shares to Roche. The proposal will expire at midnight on July 26 unless extended.
Ventana’s board of directors unanimously concluded that Roche’s $75 per share all-cash bid is inadequate and contrary to the best interests of its stockholders. Additionally, in a letter to the chairman of Roche, Jack Schuler, chairman of Ventana’s board, says, “Because $75 per share is so far below a reasonable starting point for negotiations, we also decline to engage in discussions regarding a sale of Ventana.”
“If you continue to decline to negotiate with us we will have no choice but to effect a transaction unilaterally,” states Franz B. Humer, Roche chairman, in his letter to Ventana.
Ventana believes that the offer does not reflect its stand-alone value within the tissue-based cancer diagnostics market or its growth opportunities. Also, the company has been trading above the offer price of $75 since Roche made the proposal. Ventana closed July 10 at $80.25 per share.
"We have a strong, uninterrupted seven-year track record of robust year-over-year revenue and earnings growth and a very clear strategic plan to ensure continued successful commercial and financial performance and value creation,” notes Christopher Gleeson, president and CEO of Ventana. “Roche's offer does not come close to adequately compensating Ventana stockholders for the accelerating momentum of our business, the near-term potential from our innovative platforms, the numerous catalysts that are poised to drive long-term value, our game-changing next-generation technologies, and the company's growing menu of differentiated, high-value diagnostics that are expected to deliver on the promise of personalized medicine."
Humer, in his letter, notes that “Roche continues to believe that its offer of $75 per share in cash for each share of Ventana stock is a full and fair offer and a unique opportunity for your stockholders to receive value now that reflects Ventana's current business and full future potential.”
Ventana also feels that Roche's interest may be based upon confidential information shared with Roche or its affiliates for collaborative purposes. “Our judgment about Ventana's value and potential has been based solely on publicly available information,” Humer counters in his letter. “To the extent that you believe that Ventana has additional information that would support a valuation in excess of our offer, we would be willing to consider it in a negotiation with you.”
Additionally, Ventana denies Roche’s statement that the take-over attempt came after repeated and unsuccessful attempts to negotiate with the company. Schuler notes in the letter that “Each of your proposals—first, for a controlling equity investment, and now, for a 100% acquisition—were thoroughly considered and analyzed by our board.”
"We believe Roche's public disclosures to-date are attempts to deliberately mislead the market as to our prior interactions and contacts,” Gleeson continues. “Roche chose not to allow the directors to deliberate or wait for our board's response before launching its hostile bid for Ventana. In a similar fashion, Roche commenced litigation without waiting to receive our board's Schedule 14D-9 response. We can only attribute this to high-handed tactics being used in an effort to deprive our stockholders of fair value."