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Roche to resell Genentech
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October 21, 1999: 4:23 p.m. ET
Secondary offering could raise $1B, cut Roche's stake in U.S. firm to 66%
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NEW YORK (CNNfn) - Swiss pharmaceutical firm Roche Holding AG set plans for a secondary public offering of its Genentech Inc. biotech subsidiary.
According to a regulatory filing made late Wednesday, Roche is offering 20 million shares of the firm at 143-1/2 a share. Genentech (DNA), based in South San Francisco, Calif., will not receive any proceeds from the secondary offering, but its board has approved a two-for-one stock split.
Coupled with the secondary offering, the split will quadruple the number of Genentech shares traded publicly.
A Roche spokesman declined to comment on how much the firm stands to gain on the offering. Roche has acquired Genentech stock on several different occasions, with $97 a share representing the highest price it paid, during the Genentech's initial public offering in July.
At that price, and factoring in the proposed stock split, Roche would stand to gain about $1 billion from the offering.
Roche said it will use the proceeds for general corporate purposes. The company expects to complete the offering on Oct. 26.
The offering will reduce Roche's stake in Genentech to 66 percent from its current holding of approximately 82 percent.
Roche refloated Genentech in July by selling off 15.7 percent or 20 million shares. On June 30 it bought all outstanding shares in Genentech by exercising options it obtained in 1990 and 1995.
J.P. Morgan & Co. is acting as lead manager for the offering, with Goldman, Sachs & Co., Merrill Lynch & Co., Warburg Dillon Read LLC and Robertson Stephens serving as co-managers.
Genentech shares slipped 1-9/16 to 142-1/4 in afternoon trade.
-- from staff and wire reports
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