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Roche said to have decided against bidding for rest of Chugai

Bloomberg

Roche Holding AG decided against bidding for the almost 40 percent of drugmaker Chugai Pharmaceutical Co. that it doesn’t already own and is instead focused on its $8.3 billion acquisition of InterMune Inc., according to a person familiar with the matter.

As it worked on the InterMune deal, announced Sunday, Roche was also considering a bid for Chugai, the person said, asking not to be identified because the talks were private. The Swiss company has decided against pursuing a deal with Chugai for now after the Japanese company’s management signaled opposition to a bid, the person said.

Roche, which owned 62 percent of Chugai as of June 30, was in talks to acquire the rest of the shares for about $10 billion, people familiar with the matter said on Aug. 15. Chugai later said it is “in no way in the process of reviewing any plan to become a wholly owned subsidiary of Roche.”

Chugai rose the most in more than 14 years after Bloomberg’s report of Roche’s interest. The shares ended trading last week at ¥3,660, up 57 percent this year.

Roche agreed to buy InterMune Inc. for about $8.3 billion in cash, gaining access to what may be the first drug in the U.S. for a lung disease that can be fatal within five years of diagnosis. Roche will pay $74 a share for InterMune, a biotechnology company with 450 employees, the Basel, Switzerland-based drugmaker said.

When asked on a conference call Sunday whether Roche would still make a bid for Chugai, Chief Executive Officer Severin Schwan declined to comment. A phone message left with Chugai’s U.S. representatives outside of regular business hours wasn’t immediately returned.

Chugai Pharmaceutical Co. fell the most in three years in Tokyo trading after the news of Roche Holding AG reportedly deciding against the bidding, falling as much as 9.3 percent to ¥3,320 in the morning for its biggest intraday decline since March 2011.