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May 14, 2001
 |  BioCentury  |  Finance

Swiss soap opera

A dissident shareholder, a back room stock transaction, and the subsequent firing of a CFO together have the makings for a juicy soap opera. Throw in the fact that the main characters happen to be the two leading life science companies in buttoned-down Switzerland, and there are the makings for some hot gossip.

Novartis AG's decision last week to lay out CHF4.8 billion ($2.8 billion) in cash to buy BZ Gruppe's 3.7% stake of rival F. Hoffmann-La Roche Ltd. (SWX:ROCZ) fed speculation that a full-blown merger is in the works between the Basel companies.

But both companies are taking the position that Novartis (NVS; SWX:NOVN) is a long-term financial investor, rather than a strategic partner. "It's a long-term financial investment," said NVS spokesperson Felix Raeber. "We believe that Roche is an attractive investment and it's a good price at the moment. We are still two competing, separate companies."

Using ROCZ's trading over the past year as parameters, the investment has about as much upside as it does downside. Roche's bearer shares closed Friday at CHF141.5, 23% above its 52-week low of CHF 115.1, but off...

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