Genentech to Roche: Not So Fast

Genentech (DNA Quote) may not go gentle into that good night.

The South San Francisco-based biotech firm said Thursday night that a special committee of independent directors has been formed to evaluate the $89-a-share acquisition offer from Roche.

At that same time, however, Genentech appeared to send a shot across Roche's bow, signaling that it may fight any takeover proposal from the Swiss drug giant.

"Neither Genentech nor the special committee has any obligation under the Affiliation Agreement between Genentech and Roche, or otherwise, to agree to a transaction," Genentech said in its statement.

"In addition, the Affiliation Agreement does not obligate Genentech or the special committee to agree to any specific process or any price based on valuation assessments provided by investment banks," the company added.

Roche currently owns 56% of Genentech under an agreement dating back to 1990. On Monday, Roche said it intends to acquire the remaining shares of Genentech that it doesn't already own for $89 a share, an offer Roche management has said repeatedly is "fair and generous."

Genentech shares have traded well above $89 a share since Monday, however, because investors clearly believe Roche's offer is too low and will need to be raised. Genentech shares closed Thursday at $94.65.

Deutsche Bank analyst Mark Schoenebaum, in a note to clients Thurday night, said Genentech's declaration that is under no obligation to accept Roche's offer is important because it "increases the negotiating leverage that Genentech and its minority shareholders will have in the forthcoming negotiations."