Novartis: No Comment on Market Rumors
Swiss drugmaker Novartis declined to comment on Tuesday on market talk it could sell its stake in local rival Roche to help fund its purchase of eyecare company Alcon.
Several traders had cited talk Novartis may sell its stake,worth 33% of voting rights in Roche, or some 9.6 billion Swiss francs ($9.1 billion). Novartis spokesman Eric Althoff said the company does not comment on market rumors.
Novartis has agreed to buy a majority of Alcon from food group Nestle and has made a lowball bid to minority shareholders, which a group of independent Alcon directors has dismissed as "grossly inadequate."
It has agreed to pay $39.3 billion to Nestle for a 77% stake and has made a bid originally worth $11.2 billion to minority shareholders, an offer made in stock so its value fluctuates. Novartis said last month it would fund the Alcon acquisition from available cash resources and up to $16 billion of external debt financing, suggesting it does not necessarily need to sell the Roche stake to complete the transaction.
Novartis has held a one-third voting stake in the rival Swiss drugmaker since 2003, when its attempts to push through a merger were rebuffed by Roche. Since then there has been occasional speculation Novartis could use the stake to fund another large acquisition, although Chairman Daniel Vasella has said he views the holding as a long-term strategic investment.
