Roche, Genentech Close to $95-a-Share Deal

Roche is in talks to buy the shares of Genentech it does not already own for about $95 each, a source familiar with the situation said Monday.

The two companies began negotiations after Roche raised its offer price on Friday to $93 per share and reiterated it was confident of a successful conclusion to the drawn-out takeover battle.

Shares of Genentech rose more than 2 percent in afternoon trading.

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Roche is trying to acquire the 44 percent of Genentech it does not already own.

"The new price was enough to get both sides to the table,'' said the source, who was not authorized to speak to the press.

Asked for comment by CNBC, a Genentech spokesman said the company would not comment beyond a statement it made on Friday urging shareholders not to take any action on an earlier $93-a-share offer. The statement also said its special board committee would review the offer "promptly" and provide a "detailed" response in an SEC filing.

AP

A spokeswoman at Roche, which is scheduled to hold its annual shareholder meeting on Tuesday, called the $93-a-share offer "attractive" and wouldn't comment on whether a deal was near.

"Last Friday, Roche announced a very attractive tender offer of $93 per share. It is now up to the Genentech shareholders to decide on the offer," she said. "We do not comment on market rumors."

Analysts had generally agreed that Roche's previous offer of $86.50 had little chance of success, especially as it represented a decline from the $89 Genentech rejected last summer.

Andrew Weiss at Swiss bank Vontobel still thinks $95 to $100 a share is a fair reflection of Genentech's value and said Roche might have to raise its bid again to get the deal done.

"Roche's improved bid and prolonged tender offer deadline, in our view clearly signal Roche's intent to soon take Genentech private,'' Weiss said.

- CNBC.com staff contributed to this report.

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