Roche CEO Schwan took a hands-on approach negotiating $8.3B InterMune buyout

Roche CEO Severin Schwan

When Roche ($RHHBY) CEO Severin Schwan really wants to buy a company, he gets personally involved. And that hands-on approach was evident during a few weeks in mid-summer, as the Basel-based Schwan flew out to California to meet with InterMune ($ITMN) CEO Daniel Welch to press his offer, pursuing talks that culminated in a bid of $74 a share--$8.3 billion--that would top his initial offer by $4 a share and persuade the biotech to brush off the interest shown by several other potential acquirers.

The flurry of meetings and phone calls between Schwan and Welch are spelled out in an SEC document InterMune filed late last week. A key point in the negotiations came on August 13, as news of the talks leaked to Bloomberg, which followed up with a report that Sanofi ($SNY), Roche, GlaxoSmithKline ($GSK) and Actelion ($ATLN) were all at the table. The headlines spurred more contacts, and two days later Schwan followed up with a call that would end with his sweetened offer, which proved too good for InterMune to refuse. No other number mentioned in their other talks had come close to that, and Roche was ready to close on it.

InterMune's team grabbed the deal, and the rest is biotech M&A history. The buyout marks a major turnaround for the biotech, which had to come back from an FDA rejection to succeed in Phase III with pirfenidone, InterMune's in-development drug for idiopathic pulmonary fibrosis (IPF). The disease, for which there are no approved treatments, is an often-fatal ailment that scars the lungs and inhibits oxygen absorption, leading to shortness of breath and poor pulmonary function. The drug is currently under FDA review after winning the FDA's coveted breakthrough-therapy designation in July.

Welch personally gets a rich golden hand shake for completing the buyout deal. He's taking home a windfall of $36,688,714 in severance, unvested payouts and perquisites, including a tax reimbursement of more than $6 million. And the rest of the execs aren't doing badly, either. Their payoffs:

  • Chief Business Officer Sean Nolan: $16.5 million
  • R&D chief Jonathon Leff: $16.2 million
  • General Counsel Andrew Powell: $12 million
  • CFO John Hodgman: $7.8 million

For helping to negotiate the deal Goldman Sachs and Centerview Partners each earn $35.5 million--not bad for a few weeks' effort.

- here's the SEC filing

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