Genentech Board Panel Says No Again To Roche Takeover

   DOW JONES NEWSWIRES 
 

Independent board members at Genentech Inc. (DNA) again rejected the proposal from Roche Holding AG (RHHBY) to buy the 44% of stock the Swiss drug giant doesn't already own, saying the offer undervalues the biotechnology giant.

The reaction isn't a surprise, as Roche cut the offer last month by 2.8% to $86.50 a share, or nearly $40 billion. It also comes as a special board committee was looking for $112 a share after the initial bid of $89 was made. The committee subsequently said the first offer substantially undervalued Genentech.

"Genentech's strong projected financial performance implies a valuation substantially in excess of Roche's offer price," Dr. Charles Sanders, the committee's chairman, said Monday. He added the company's "exceptional management and team, including its world renowned scientists, can create far more value for stockholders than Roche has offered."

Roche is taking its bid for the outstanding Genentech stake to the company's shareholders and has said it would exercise its option to have a majority of seats on Genentech's board.

It has also been busy in the debt markets raising money to avoid having to borrow from banks. Roche last week sold a record $16 billion in bonds to help finance the hostile takeover. That cash, though, could also boost the chances that Roche might ultimately raise the offer to cement shareholder approval.

Genentech shares closed Monday at $84.55 and rose to $84.60 in after-hours trading.

-By Kevin Kingsbury, Dow Jones Newswires; 201-938-2136; [e-mail]