Roche Lowballs G-Tech

Last summer Swiss pharmaceutical giant Roche Holding couldn’t get Genentech to bite on its bid of $89 per share for the 44% of the South San Francisco biotech company it doesn’t already own, so last week it offered $86.

Genentech’s directors called that a “unilateral and opportunistic step” that takes “advantage of current market conditions,” according to the Wall Street Journal.

To which Roche responded it will present its offer directly to Genentech shareholders in “approximately two weeks,” and by the way it’s exercising its right to hold a majority of seats on Genentech’s board.

Roche thinks it can get Genentech on the cheap because some of its hedge fund shareholders have developed quite a hankering for cash these days.

Or as Roche Chairman Franz Humer said, “I think we all agree that the world has changed since (July).”

Right on cue, at its Q4 earnings announcement, Genentech lowered expectations for 2009 citing what else, market uncertainties and the economic mess.

But the trophy on the mantlepiece wouldn’t look quite so nice if Roche’s move hacks off Genentech scientists to the point where they bolt, which some have threatened to do.

Then again, where are they going? Biotech isn’t exactly teeming with job opportunities these days.

Larry Feinberg, president of Oracle Investment Management, didn’t seem inclined to post his million or so Genentech shares at $86. “It seems…Roche is trying to instill fear into the hearts of Genentech shareholders,” he told the Journal.

Besides, it’s far from clear in these economic times that Roche can secure adequate financing to close the deal anyway.

Anybody got a spare $30-35 billion lying around?

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