After months of sometimes tense negotiating, Roche (Basel, Switzerland) has finally sweetened its offer for Ventana Medical Systems (Tucson, Arizona) to $89.50 a share in cash and the companies appear a step closer to completing their oftentimes less-than-graceful pas de deux that began back in June. The companies value the deal at $3.4 billion.

Ventana, who felt the original unsolicited $75 a share offer did not reflect its true value, said both boards have approved a merger agreement at the improved offer price and that its board recommends shareholders tender their shares to Roche.

The amended offer will expire at 7 p.m., EST, Feb. 7.

Just last week Ventana rejected Roche’s fifth unsolicited tender offer to acquire shares of Ventana for $75 a share in cash. Christopher Gleeson, president/CEO of Ventana called that an “inadequate price,” but said that discussions with Roche were “progressing,” (Medical Device Daily, Jan. 18, 2007).

The companies entered a confidentiality agreement, allowing Roche to begin due diligence and have access to non-public information about Ventana, in November (MDD, Nov. 15, 2007).

Ventana shareholders had been aggressively cool to Roche’s $75-a-share offer, first disclosed at the end of June (MDD, June 27, 2007), after months of what Roche said were fruitless private advances.

The new offer represents a premium of 4.9% to Ventana’s closing price on Friday, a 19.3% premium to Roche’s initial offer on June 27, and a 72.3% premium to Ventana’s closing price on June 22.

“Ventana’s board of directors has been dedicated to ensuring that any strategic value creation opportunities with Roche or other third parties would adequately reflect the inherent value of the company, its steady growth momentum, and the magnitude of potential synergies in a combination,” Gleeson said.

He said the board believes the transaction, at $89.50 a share, is in the best interests of Ventana’s shareholders and “we recommend that our shareholders tender into this revised offer.”

Gleeson will continue as CEO of Ventana’s business following merger close and will become a member of Roche’ executive committee. Ventana will remain based in Tucson, Arizona, and its employees will become part of the combined company.

While the dance appears to be in its final stages, a report on the Forbes.com web site indicated that may not be the case. Though Ventana’s board has approved the deal it was reportedly over the objections of Chairman Jack Schuler and Vice Chairman John Patience. Neither has agreed to sell their shares to Roche. That’s 12% against the deal.

Larry Feinberg, manager of the Oracle Partners hedge fund, which owns another 8% of Ventana’s stock, said he believes that Roche’s $89.50 offer is too low. The day before the announcement, Ventana’s stock closed at $85.33. Feinberg said he doesn’t want to sell his shares of Ventana for under $100. Since Feinberg, Schuler and Patience represent a fifth of the votes, they can potentially disrupt the deal.

Roche said that the acquisition of Ventana, a developer of tissue-based cancer diagnostics, will broaden its diagnostic offerings in both in vitro systems and oncology therapies.

“Our combined company will be uniquely positioned to further expand Ventana’s business globally and together develop more cost-efficient, differentiated and targeted medicines. We are delighted to welcome the employees and management team of Ventana and look forward to jointly developing novel solutions for our customers,” said Franz Humer, Roche CEO and chairman.

Greenhill & Co. and Citi acted as financial advisors to Roche; Davis Polk & Wardwell acted as legal counsel. Merrill Lynch & Co. and Goldman Sachs acted as financial advisor, and Sidley Austin acted as a legal advisor to Ventana.

In other dealmaking activity:

• Bausch & Lomb (B&L; Rochester, New York) reported agreeing to acquire eyeonics (Aliso Viejo, California), a private ophthalmic device company. Financial terms of the agreement were not disclosed.

The deal is expected to close during 1Q08 subject to standard regulatory approval.

eyeonics’ operations will become part of B&L’s surgical business, which offers a line of standard intraocular lenses, phacoemulsification equipment, vitreoretinal and refractive products. Andy Corley, eyeonics’ CEO, co-founder, and chairman, will lead the U.S. surgical business.

The deal represents B&L’s first acquisition since being bought out by private equity firm Warburg Pincus in October (MDD, Oct. 29, 2007) for $4.5 billion.

eyeonics developed the crystalens intraocular lens (IOL), FDA-approved for the treatment of cataracts in November 2003. The crystalens is designed to replace the eye’s natural lens and has been implanted in more than 95,000 eyes worldwide, according to the company.

“This acquisition immediately places Bausch & Lomb into the rapidly expanding premium IOL market,” said Ronald Zarrella, CEO and chairman of B&L. “The crystalens technology complements our existing cataract surgical business, including our Stellaris Vision Enhancement System and our portfolio of monofocal IOLs.”

The global premium IOL market is growing at more than 20% annually, according to eyeonics. In 2007, eyeonics generated revenues of about $34 million, a 100% increase over the prior year revenues of $17 million. The company said its crystalens IOL representd roughly 30% of the presbyopic IOL market in the U.S.

Corley said eyeonics expects the deal to accelerate adoption of the crystalens IOL, given B&L’s global sales and marketing reach.

B&L also said yesterday it expects to report 4Q net sales of between $654 million and $660 million, compared to $597.6 million in the year-ago ’06 period. For the full year, the company projects it will report net sales between $2.513 billion and $2.519 billion, compared to $2.292 billion in 2006.

• Werfen Group (Barcelona, Spain), a company that develops in vitro diagnostic solutions and devices, said it will acquire all outstanding shares of INOVA Diagnostics (San Diego), a manufacturer of in vitro diagnostic tests for autoimmune diseases.

The deal is expected to close in 1Q08. Financial terms were not disclosed.