Ventana Rejects Roche's Unsolicited Tender Offer

July 12, 2007
Pharmaceutical Technology Editors
ePT--the Electronic Newsletter of Pharmaceutical Technology

Ventana Medical Systems, Inc.'s board of directors unanimously decided that Roche's (Basel, Switzerland) $75 per share cash offer is inadequate in multiple respects and contrary to the best interests of Ventana's stockholders.

Tucson, AZ (July 11)-Ventana Medical Systems, Inc.’s board of directors unanimously decided that Roche’s (Basel, Switzerland) $75 per share cash offer is inadequate in multiple respects and contrary to the best interests of Ventana’s stockholders. The board advises stockholders not to tender any of their shares to Roche.

Ventana is publicly traded under the symbol VMSI. The company’s share price rose 2.8% to $82.53 on the day of the board’s announcement.

Ventana’s board determined that Roche’s offer does not fully reflect the value of Ventana’s growth opportunities and is timed to acquire stock before the value increases. The board also decided that the offer is financially inadequate because it values Ventana at a price below recent trading levels. In addition, the board found that the offer does not reflect the value of synergies that would result from combining the two companies.

Jack Schuler, chairman of Ventana’s board, stressed that the board’s decision was based on the board’s responsibility to maintain value for the company’s stockholders. In a company press release, Schuler said, “Simply put, we believe that Roche is trying to capture value for its stockholders that rightly belongs to Ventana’s stockholders.... Through its proposed transaction, Roche is attempting to obtain for itself unique strategic value and synergies that we believe would accrue to the broader pharmaceutical industry and Ventana’s stockholders over the near and long term.”

Citing the company’s recent growth, Ventana’s President and Chief Executive Officer Christopher Gleeson remarked, “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, … and the company’s growing menu of differentiated, high-value diagnostics that are expected to deliver on the promise of personalized medicine.”

In a company press release, Roche said its offer represents a 44% premium above Ventana’s closing share value on the last trading day before the offer. “Roche continues to believe that its offer of $75 per share in cash is a full and fair offer and a unique opportunity for Ventana’s stockholders to receive value now that reflects Ventana’s current business and full future potential,” said Franz B. Humer, the company’s chairman and CEO.

Roche’s management said it preferred to negotiate with Ventana, but that the company would continue to pursue a transaction unilaterally if Ventana refuses to negotiate. In addition, Roche will consider nominating new directors to Ventana’s board and proposing to amend Ventana’s bylaws.