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Roche to sell more Genentech
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October 8, 1999: 6:14 a.m. ET
Drug co. will give up another 16% stake in stock and bond offer that could raise $4.8B
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LONDON (CNNfn) - Swiss drug giant Roche Holdings will sell a further 15.6 percent stake in San Francisco-based Genentech, less than three months after it reissued shares in the biotech company in an initial public offering. The share and bond offering could raise as much as $4.8 billion.
The public offer of as many as 22 million shares is about 20 percent of the Swiss company's holding.
Roche didn't say when it would offer the shares, but if it sold the entire allotment at Thursday's New York closing price of $172.81, it would raise about $3.8 billion. That's nearly double the $97 price the shares sold for on July 20th.
Additionally, Roche also intends to issue convertible bonds exchangeable for up to 5.5 million Genentech shares, raising another $1 billion.
Roche currently holds about 82 percent of Genentech. The sale will reduce its holding to 65 percent.
"We have decided to sell part of our stake in Genentech in order to provide more liquidity in Genentech shares as requested by the market," Franz B. Humer, Roche's chief executive officer, said in a statement. The shares have been volatile.
At the same time, Genentech also announced a two-for-one stock split, effective after the offering by Roche, as well as a 6 percent increase in third-quarter earnings.
Founded in 1976, Genentech is now one of the world's largest biotech companies. It uses a patented gene-splicing technique to produce genetically engineered drugs, including top-seller Activase, a blood-cot treatment for heart attack sufferers.
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