The Genentech Guessing Game - What Will Roche Offer Next?

Shares of Genentech (DNA) are taking another little breather after rising to around 99 bucks on speculation that a higher offer is coming from Roche (RHHBY.PK).

Analyst guesstimates of the ultimate takeout price -- if, indeed there is one -- are generally above a hundred dollars a share.

And the guy who recently suggested that $130 isn't out of the question is changing his odds today of a deal getting done.

Geoffrey Porges at Sanford C. Bernstein, who had been lamenting the potential loss of the Genentech culture and machine since Roche made its surprise bid, is now telling clients in a research note that an "acquisition seems inevitable."

He cites the recent statement from the special Genentech board committee, which Porges says "suggests that the company is resigned to a transaction..."

As a result, he's raising his DNA price target from $101 to $109.

But don't expect a deal to get done overnight: Porges thinks there will be at least one or two more negotiating rounds before they come to terms somewhere in the range of $105-$115 a share.

Finally, he now ascribes a less than 15 percent chance of the whole thing falling apart. But if that happens, look out below.

A unit of Bernstein owns at least 1 percent of DNA.

Comments

[turd furgeson:]

What a shame if a deal does get done. Roche is just like Pfizer...unable to develop new novel med's themselves, they poach great companies.

2008 Aug 21 06:52 PM

[CrossProfit:]

Updated:
BERN - $130 - "Roche offer substantially too low."
source:
seekingalpha.com/artic...
BMO - $104
source: news.moneycentral.msn....
Citi raises target from $91 to $108
CrossProfit $113/$118
source:
www.crossprofit.com/ar...
JPM - $110 or higher..
source: news.moneycentral.msn....
LEH - $105
MSCO - $110 is fair value.
Rodman - $106 to $123
source:
www.bloggingstocks.com.../
Oppenheimer & Co raised target from $88 to $105
source: www.bloomberg.com/apps...
RBC - $95 to $100 range.
GSCO - regular $88 target withdrawn, advising party on deal.
UBS - $115 to $135

2008 Aug 22 02:43 PM

[Genentech fan:]

Why would Art and the special committee entertain the buyout without waiting for the interim look at the adjuvant trial in November? That would be the absolutely fairest thing to do for the minority shareholders!

2008 Aug 23 03:12 PM