Roche's Persistence Plus 19% Premium Over Initial Offer Wins Ventana

In an acquisition process that started June 2007, Roche, after feeling the sting of rejection five times, made a sixth offer Ventana did not refuse and the Swiss biotech giant carried off the prize for a fortune.

With Ventana positioned as its leader, histopathology (tissue-based diagnostics) measuring 10% annual growth is one of the fastest developing segments in the industry. Roche considers Ventana the ideal strategic partner to create a broad platform, and essential to develop unique positions in personalized healthcare solutions in oncology. Roche's leading oncology drug repertoire and strength providing in vitro diagnostics combines well with Ventana's global leadership in histopathology. Ventana, in turn will benefit from Roche's capabilities in genomics, proteomics, workflow automation, and testing standardization, to innovate platforms and solutions used in tissue analysis.

While both companies appreciated the potential significant synergies to be derived from the merger, Ventana's board demurred at what they considered the low price Roche was apparently willing to pay. The board rejected Roche's offer of US$75 per share first tendered in late June 2007. In a move that raised some corporate eyebrows, Roche, at intervals during the following six months tendered the same $75 per share offer four more times--offers which were turned down, and more often than not characterized as "grossly inadequate” by Ventana's board.

Roche broke through the impasse with an $89.50 per share cash offer, which secured Ventana's mark on the dotted line. This offer represents a 4.9% premium over Ventana's closing share price on January 18, 2008, and a 19.3% premium over Roche's initial offer of $75. It is interesting to note that Roche's initial $75 offer represented a 44% premium over Ventana's closing share price of $51.95 on June 22, 2007. The companies valued the deal at about $3.4 billion.

Following completion, Roche intends to operate Ventana as a stand-alone business unit within the Roche Diagnostics Division, keeping Ventana's headquarters in Tucson, Arizona. Christopher Gleeson, Ventana's President and Chief Executive Officer, will continue as CEO of Ventana's business and become a member of the Roche Diagnostics Executive Committee.

"…Our combined company will be uniquely positioned to further expand Ventana's business globally and together develop more cost-efficient, differentiated and targeted medicines,” commented Franz B. Humer, Chairman and CEO of Roche.

F. Hoffman-La Roche Ltd. (Basel, Switzerland), the world largest biotech company, and one of the world's leading pharmaceutical and diagnostics groups, employs over 75,000 and posted more than CHF 42 billion sales in 2006. Roche provides innovative products and services for the early detection, prevention, diagnosis and treatment of diseases, is the world leader in in-vitro diagnostics and drugs for cancer and transplantation, a market leader in virology and active in other major therapeutic areas.

Ventana Medical Systems, Inc. (Tucson, AZ, USA) has 800 employees and made about $238 million sales in 2006. Ventana develops, manufactures, and markets instrument/reagent systems that automate tissue preparation and slide staining in clinical histology and drug discovery laboratories worldwide.


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