UPDATE: Roche Says Still Plans To Raise Dividend This Year
January 12 2009 - 4:17AM
Dow Jones News
Roche Holding AG (ROG.VX) Monday said it still plans to pay a
higher dividend this year, rejecting a press report that suggested
the Swiss drugmaker may scrap the payout to finance its planned
takeover of the shares it doesn't already own in U.S. biotech
company Genentech Inc. (DNA).
Roche, based in Basel, said it plans to raise its dividend each
year over the next three years, starting from 2008, when the
statements were made. "Our dividend policy remains unchanged,"
spokesman Daniel Piller told Dow Jones Newswires.
The company's shares opened lower Monday amid concern Roche
won't pay any dividends this year - worries fueled by a report in
the Financial Times Saturday suggesting the drugmaker plans to
raise its bid for Genentech.
At 0830 GMT, Roche was down CHF3.00, or 1.8%, at CHF168.90,
underperforming the Swiss market and the broader European
healthcare sector, which were down 0.8% and 0.9%, respectively.
The FT report said Roche has financing in place to buy the 44%
of Genentech it doesn't already own. The article suggested Roche is
thinking about raising its offer to $95 a share from the current
$89 which Genentech has rejected as too low. Roche declined to
comment on the report.
Roche's planned takeover, launched in July, has since stalled
amid turmoil in financial markets. Frozen credit markets have
hampered efforts to raise the $44 billion to $53 billion that Roche
needs to complete a deal, said Sachin Jain, analyst at Merrill
Lynch, in a note to investors. He has a buy rating on Roche.
The FT report said Roche is about to sign a $10 billion
revolving credit facility, and has agreed on a longer-term facility
for up to $25 billion with a syndicate of 10 banks. The article
suggested that the funds may be raised at 4%, which, if true, would
be "highly attractive" terms, Merrill Lynch's Jain said.
Company Web Site: http://www.roche.com
-By Anita Greil, Dow Jones Newswires; +41 43 443 8044 ;
anita.greil@dowjones.com
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