M&A

What’s taking the FTC so long? Roche won’t say, but insists it will bag Spark on time — despite third delay

Roche is delaying its buyout of Spark Therapeutics for a third time, giving itself one last chance to complete the deal within the first half of 2019.

When the Swiss pharma giant announced in late April it was withdrawing a Premerger Notification and Report Form once again, it expected to refile the documents around May 9. But it now wants to push the refiling day back two weeks, setting May 23 as the new go time.

As was the case for the previous delays, Roche cited an ongoing regulatory review as the reason for refiling and extending its offer to acquire the gene therapy biotech for $4.3 billion.

Upon my query, the spokesperson responded in 5 minutes with what has become a familiar answer:

Both Roche and Spark were aware that FTC review and clearance would be required for the transaction. This step in the process allows the FTC more time to complete its review and is not unusual in a transaction of this type.

There is no change in assumptions. We expect it will be completed according to our guidance in the first half of 2019.

Spark shareholders now have until June 14 to tender their shares. The percentage of shares already sold has further declined to 21% at last count, compared to 26.1% and 29.4% registered on previous deadlines. Both were still a far cry from the 50% required to complete the deal, though Roche maintained that it’s not unusual for “a significant portion of shareholders” to wait until the last days of the offer period.

Philadelphia-based Spark faces several lawsuits from investors who feel cheated by the leadership. A month ago, Investor rights law firm Halper Sadeh launched a class action suit alleging that when trying to win over shareholders, the biotech $ONCE provided “materially incomplete and misleading information concerning, among other things, the valuation analyses and methodologies prepared by Sparks’ financial advisor in connection with the rendering of its fairness opinion.”

In a February Q&A document intended to assure employees, Spark noted that Roche intends to keep it as a dedicated, autonomous gene therapy specialist, while pouring in the resources to build a whole unit around it.


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