A Medical Device Daily

A special committee of the board of directors of Genentech (South San Francisco, California) urged the company's shareholders to take no action at this time with respect to the hostile tender offer commenced by Roche (Basel Switzerland) to acquire all of the outstanding shares of Genentech stock not owned by Roche at a price of $86.50 in cash per share, which was $2.50 less per share than what Roche originally offered to buy the company for last July (Medical Device Daily, July, 22, 2008).

Currently, Roche owns about 55.8% of the outstanding shares of Genentech.

The special committee said it intends to take a formal position regarding the Roche offer within 10 business days, and will explain in detail its reasons for that position by filing a Statement on Schedule 14D-9 with the Securities and Exchange Commission.

The special committee is represented by Goldman, Sachs & Co. and Latham & Watkins. Genentech is represented by Wilson Sonsini Goodrich & Rosati.

In other dealmaking news:

• Advanced Medical Optics (AMO; Santa Ana, California) reported that, in connection with its previously disclosed cash tender offer for its outstanding 7-1/2% senior subordinated notes due 2017 and the related consent solicitation to amend the indenture governing the notes, it has amended the offer to increase the total consideration and extend the consent deadline as such terms are defined in the offer to purchase and consent solicitation statement dated Jan. 27 and the related letter of transmittal and consent.

The expiration time of the tender offer remains midnight EST on Feb. 24, unless extended or earlier terminated. The new consent deadline is midnight EST on Feb. 24.

The total consideration to be paid for notes that are validly tendered and not validly withdrawn at or prior to the expiration time has been increased to $1,155.00 for each $1,000 in principal amount of notes, plus accrued and unpaid interest to, but not including, the settlement date. The total consideration, as amended, includes a consent payment of $30 for each $1,000 principal amount of the notes to holders who validly tender and do not validly withdraw their notes and provide their consents to the proposed amendments to the indenture governing the notes at or prior to the expiration time.

Morgan Stanley & Co. is dealer manager and solicitation agent for the tender offer and the consent solicitation.

The notes tender offer is in conjunction with Abbott Laboratories' (Abbott Park, Illinois) $2.8 billion cash tender offer (MDD, Jan. 13, 2009) to purchase all of the outstanding shares of AMO.

AMO is comprised of three segments: cataract surgery, laser vision correction (LASIK), and eye care products.

• Tenet Healthcare (Dallas) reported that two of its subsidiaries have signed a definitive agreement to sell USC University Hospital and USC Kenneth Norris Jr. Cancer Hospital to the University of Southern California (all Los Angeles).

The transaction is expected to generate cash proceeds of $275 million from the sale of property and equipment. From these proceeds, $30 million will be deferred and placed in an escrow account for up to four years. In addition, Tenet's subsidiaries will retain substantially all of the hospitals' working capital, which is expected to result in about $35 million of incremental cash proceeds. Tenet said it expects to use the proceeds for general corporate purposes.

USC has committed to offer employment to all or substantially all current employees who are in good standing. The transaction is subject to conditions and regulatory approvals that must be satisfied prior to closing. The closing, which is not conditional on financing, is targeted for completion by March 31. As part of the transaction, Tenet and USC will drop all litigation pending between them.

Tenet said it expects to record an impairment charge of about $40 million, pre-tax and after-tax, in discontinued operations in 4Q08 related to the sale.

Tenet owns and operates acute-care hospitals and related ancillary healthcare businesses, which include ambulatory surgery centers and diagnostic imaging centers.