Roche Bonds Pay $624 Million Windfall in ‘Money Left on Table’

[Joanne98]

Feb. 27 (Bloomberg) -- Roche Holding AG rewarded investors with a profit of more than $624 million for agreeing to buy $30.8 billion of bonds that will fund its hostile bid for Genentech Inc.

Roche’s $16.5 billion of U.S. notes, with interest rates ranging from 4.5 percent to 7 percent, appreciated more than $469 million since they were sold last week, according to data compiled by Bloomberg. The Basel, Switzerland-based drugmaker’s $14.3 billion of notes denominated in euros and pounds, the biggest issue in Europe by a non-financial company, rose in value by $155 million since the Feb. 25 sale, the data show.

“There was little choice than to play it safe from the issuer’s perspective by leaving some money on the table,” said Georg Grodzki, head of credit research at Legal & General Group Plc, which manages more than 110 billion pounds ($156 billion) in fixed-income assets. “If a deal of this size had turned into a lemon, it would have landed the market with a huge and prolonged headache.”

Roche, maker of the Accutane skin-care drug and the Tamiflu influenza treatment, is raising money to finance its unsolicited $42.1 billion bid for the 44 percent of South San Francisco, California-based Genentech it doesn’t already own. Roche’s bond sales added to the record $554 billion that companies with investment-grade ratings sold so far this year as the freeze in credit markets thawed.

http://www.bloomberg.com/apps/news?pid=20601109&sid=a5BXy.I3l_g4&refer=home

Just like the 80's. The hostile takeovers are starting again.