Roche Hesitates From Purchasing Alexion Over Price, NZZ Reports
Aug. 11 (Bloomberg) -- Roche distancing itself from deal with Alexion Pharmaceuticals, NZZ am Sonntag reports.
• Alexion would fit strategically with Roche but ideas over price differ: NZZ am Sonntag.
• “We don’t only look at acquisitions from a strategic point of view. They must also fit culturally and pay off financially,” Roche CEO Severin Schwan said in Switzerland a few days ago: NZZ am Sonntag
• Emphasis is “financially,” two analysts said independently: NZZ am Sonntag
• Roche doesn’t comment on rumors, spokeswoman Silvia Dobry said by phone; confirms Schwan’s comments made to analysts
what has gotten lost in all of this is that Roche CEO has essentially confirmed that they are in talks to acquire Alexion. Any speculation that this was all just rumor has now been put to bed....Whether or not a deal actually gets done is anyone's guess, but I don't think there is any doubt that talks are ongoing
This is all part of the pre-offer dance. OK, imagine you are the CEO of Roche. You call a strategic meeting with your PR director, your corporate development director, and general counsel. You've determined you don't want to pay more than $130 a share for ALXN. You know that ALXN probably won't budge under $175 or more. So you tell your PR director to get some carefully placed BUZZ about Alexion, specifically about how Roche won't just gobble them up with a blank check. Alexion hired Goldman Sachs to help position them properly for a sale and to get other suitors in line. Roche is trying to manage the psychology here - a little scare tactic to let Alexion's management know in no uncertain terms that they will walk if ALXN gets greedy. So the market reacts by selling off. Whoopee. We are still at first base here.