Genentech (DNA) Wanted A Higher Offer

The Wall Street Journal had a piece today saying that Genentech (NYSE: DNA) sought a higher offer, north of $100.

Genentech's board wanted Roche Holding AG to pay $112 a share to buy the remainder of the Genentech shares it didn't already own. The $112 per share price is $23 a share more than Roche offered to pay when it announced its bid last July.

The "asking price" was disclosed in documents Roche filed late Monday with the SEC in connection with the launch of its hostile tender offer at $86.50 a share.

The July offer was $89 a share, or about $44 billion for the 44.2% of Genentech shares Roche doesn't own. Genentech had rejected the $89-a-share offer as it felt it substantially undervalued the company.

Roche told Genentech that it believes the company is overly optimistic its growth prospects and $112 is too high of a price. In particular, Roche said Genentech was over-estimating growth prospects for its cancer drug Avastin.

Roche said Monday that it plans to exercise its option to hold a majority of the seats on Genentech's board.

On January 30, Roche announced it would go directly to shareholders with a tender offer at $86.50 a share. The bid launched Monday expires at midnight EST March 12 unless Roche extends it.

Genentech urged shareholders to take no action in response to the tender offer and said it would explain its position in a formal filing with the SEC within 10 business days.

Genentech shares finished at $82.70 in Monday trading on the New York Stock Exchange, down 30 cents and below Roche's offer.

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