Monday, June 7, 1999
When one company controls another company's equity, the latter
usually loses degrees of freedom. But in the case of Roche's decision to buy
the rest of Genentech Inc. for $4.2 billion and sell back 19 percent to the
public, the issue may be how GNE pursues its new freedom to drive up its market
value and become a force in dealmaking.
While GNE had worked hard over the past few years to get its
stock price above the $60 shareholder put while avoiding a Roche decision to
exercise its call option, the creative solution in the end was probably something
that neither envisioned when the original deal was cut.