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Case Question of Roche
Assume Genentech has 1,052 million share outstanding :
1. Why is roche seeking to acquire 44 % of genetech it
doesn’t own ?
2. From roche’s point of view, what are the advantages of
owning 100 % of genetech ? What are the risk ?
3. As a majority shareholder of genetech, what
responsibilities does Roche have to the minority
shareholder ?
4. As of June 2008, what is the value of the sinergy roche
anticipates from merger with genetech ?
5. Assess the value of sinergies per share of genetech !
( use weighted average cost of capital 9 % )
Assume Genentech has 1,052 million share
outstanding :
Based on DCF valuation technique, what range
of value is reasonable for genetech as stand
alone company in june 2008 ) use wacc 9 %
assume genetech has 7 billion usd cash,
( ignore value of sinergy )
Assume Genentech has 1,052 million share outstanding :
• Based on DCF valuation technique, what range of value is
reasonable for genetech as stand alone company in june
2008 ) use wacc 9 % assume genetech has 7 billion usd
cash, ( ignore value of sinergy )
• What does the analysis of of comparable companies
( exhibit 12,13,14 ) indicate about genetech’s value within
the range established in question above ?
• How has the financial crisis affected the genetech’s value ?
What change the assumption occured between jun 2008
and january 2009 ?
• How did Genetech Board and management respond to
Roche’s offer of 89 per share ?

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Case question of roche

  • 2. Assume Genentech has 1,052 million share outstanding : 1. Why is roche seeking to acquire 44 % of genetech it doesn’t own ? 2. From roche’s point of view, what are the advantages of owning 100 % of genetech ? What are the risk ? 3. As a majority shareholder of genetech, what responsibilities does Roche have to the minority shareholder ? 4. As of June 2008, what is the value of the sinergy roche anticipates from merger with genetech ? 5. Assess the value of sinergies per share of genetech ! ( use weighted average cost of capital 9 % )
  • 3. Assume Genentech has 1,052 million share outstanding : Based on DCF valuation technique, what range of value is reasonable for genetech as stand alone company in june 2008 ) use wacc 9 % assume genetech has 7 billion usd cash, ( ignore value of sinergy )
  • 4. Assume Genentech has 1,052 million share outstanding : • Based on DCF valuation technique, what range of value is reasonable for genetech as stand alone company in june 2008 ) use wacc 9 % assume genetech has 7 billion usd cash, ( ignore value of sinergy ) • What does the analysis of of comparable companies ( exhibit 12,13,14 ) indicate about genetech’s value within the range established in question above ? • How has the financial crisis affected the genetech’s value ? What change the assumption occured between jun 2008 and january 2009 ? • How did Genetech Board and management respond to Roche’s offer of 89 per share ?