Genentech, Inc.
Ticker Symbol:
NYSE: DNA
Practice:
Securities Fraud & Shareholder Litigation
Phase:
Settled / Closed Chimicles & Tikellis LLP is one of the Co-Lead Counsel for Plaintiffs in a consolidated stockholder class action challenging actions taken by Roche Holdings, Inc., a wholly-owned subsidiary of Roche Holding Ltd’s (together with its subsidiaries and affiliates, “Roche”), to acquire the remaining approximately 44% of the outstanding common stock of Genentech, Inc. (“Genentech” or the “Company”) it did not already own.
On July 21, 2008, Roche made a proposal to acquire 100% of Genentech’s outstanding stock for $89.00 per share (the “July Proposal”). Thereafter, Genentech’s Board of Directors formed a special committee of its directors to review Roche’s July Proposal (“Special Committee”), and on August 12, 2008, the Special Committee rejected Roche’s July Proposal.
On August 18, 2008, Co-Lead Counsel filed a Verified Consolidated Class Action Complaint, seeking declaratory and injunctive relief concerning the validity, interpretation, and application of certain provisions of a pre-existing affiliation agreement between Roche and Genentech, dated July 22, 1999 (the “Affiliation Agreement”) and Genentech’s amended and restated certificate of incorporation (the “Certificate”).
On September 24, 2008, counsel to Roche entered into a stipulation with Co-Lead Counsel (the “First Stipulation”), pursuant to which Roche agreed that mere compliance with the Affiliation Agreement in a merger would not excuse Roche and Genentech’s directors from fulfilling their fiduciary duties to Genentech’s stockholders. The Court entered the First Stipulation as an order on September 26, 2008. During the months that followed, the Special Committee sought unsuccessfully to obtain an increase in the $89 per share offer. The First Stipulation is linked below.
On February 9, 2009, Roche launched a hostile tender offer for Genentech’s remaining shares at $86.50 (the “Offer”). On February 19, 2009, Plaintiffs supplemented their complaint challenging the Offer and sought an expedited schedule to be heard by the Court on a Motion for Preliminary Injunction seeking to halt the Offer unless or until false and misleading disclosures made by Roche in its Offer were corrected and coercive aspects of the Offer removed.
Following the start of briefing of Plaintiffs’ Motion for Preliminary Injunction, Roche filed several amendments to its Offer, which included disclosures of additional material information demanded by Plaintiffs, and ultimately an increase of the price to be paid in the Offer from $86.50 to $93.00.
Following a hearing of Plaintiffs’ Motion for Preliminary Injunction on March 9, 2009, Roche and the Special Committee entered into a stipulation with Plaintiffs (the “Second Stipulation”), which set forth the parties’ agreement concerning several protections for the Genentech stockholders in the consummation of the Tender Offer, which removed the coercive aspects of the Tender Offer, including the merger consideration payable in a short-form merger, the role of the Special Committee in the process of a short-form merger and the right of non-tendering Genentech stockholders to pursue statutory appraisal or, as appropriate, a quasi-appraisal remedy in connection with a short-form merger. In exchange for these valuable concessions, Plaintiffs agreed to withdraw their Motion for Preliminary Injunction. The Court entered the Second Stipulation as an order on March 11, 2009. The Second Stipulation is available by clicking the link below.
Meanwhile, in early March 2009, Co-Lead Counsel had several discussions with Roche’s counsel, during which Co-Lead Counsel indicated that, if Roche increased its offer to $95.00 per share, Co-Lead Counsel would support an amendment to the Affiliation Agreement, so as to ensure that all Genentech stockholders would receive the same price per share, without affecting their appraisal rights.
On March 12, 2009, Roche and Genentech entered into an Agreement and Plan of Merger, dated March 12, 2009 (the “Merger Agreement”), pursuant to which Roche would acquire the outstanding publicly held shares of Genentech it did not own for $95.00 per share (the “Merger”). In connection with the Merger Agreement, Roche and Genentech amended the Affiliation Agreement as contemplated by Co-Lead Counsel.
On March 23, 2009, the parties finalized a settlement agreement that contemplates Roche’s proceeding with the Merger in accordance with the Merger Agreement and a completed final resolution of the Action due to the benefits stockholders received under the Merger and the benefits achieved through the First Stipulation, the Second Stipulation and the added disclosures in the amendments to the Schedule TO. The Settlement Agreement and Exhibits are linked below. At a hearing on July 9, 2009, the Court approved the settlement in full and granted Plaintiffs’ application for attorneys’ fees and expenses.
Attorneys to Contact:
Pamela S. Tikellis (PamelaTikellis@chimicles.com)
Robert J. Kriner, Jr. (RobertKriner@chimicles.com)
A. Zachary Naylor (ZacharyNaylor@chimicles.com)
P.O. Box 1035, 222 Delaware Ave, Suite 1100, Wilmington, DE 19801 Phone: 302-656-2500