NEW YORK (AP) — Swiss drug developer Roche boosted its hostile tender offer for biotechnology pioneer Genentech Inc. to $93 per share Friday, raising the total offer value to about $45 billion, after its initial offer failed to pick up much support from shareholders. For weeks, Genentech’s board had been calling Roche’s $86.50 bid too low, with much of Wall Street saying shareholders likely wouldn’t bite at the offer. In its statement Friday, Roche said it received tenders for only 500,000 shares in the tender offer that was set to expire March 12, a tiny fraction of the 44 percent the company needs to take control of Genentech. As of Feb. 6, Genentech has just over 1.05 billion shares of common stock outstanding, of which Roche owned about 587.2 million. It needs the support from a majority of the other shareholders to complete any deal. The $86.50 bid had been a surprise to many, following rejection of a $89-per-share bid rejected by Genentech’s board in July. The latest bid adds up to about $45 billion, and the tender offer has been extended to March 20 from March 12. Funding on Roche’s side, though, may still remain an issue. In a Securities and Exchange Commission filing earlier Friday, the company said it had raised about $36 billion through a series of debt offerings, and it calculated the $86.50-per-share bid to cost about $42.1 billion. It said the rest of that funding could be raised through a combination of debt financing, commercial paper, or existing credit facilities, among other methods. The latest statement from Roche didn’t say how the increased offer might affect its ability to raise additional funding. Meanwhile, the increased bid seems a reversal from statements the company made in an ealier regulatory filing Friday, in which it plainly stated its justification for offering a lower-than-expected bid. Those factors included the weakened economy and Genentech’s own 2009 outlook. “Based on conversations with Genentech shareholders, we believe that there is a strong sentiment to bring this process to a conclusion,” Franz B. Humer, chairman of the Roche Group, said in the statement. “As a result, we are increasing our price to $93 per share to maximize shareholder participation and will proceed quickly to complete all necessary financing.” Genentech has not yet commented on the higher offer, and representatives could not immediately be reached. On Monday, Roche spent a four-hour meeting with analysts detailing long-term sales and research projections to back up its assertion that the company was worth more than the Roche offer. In previous regulatory filings, Genentech said it could be worth up to $112 per share.
