Roche Holding AG
Roche increased its offer to buy the 44 percent of Genentech it does not already own by 7.5 percent late on Friday and reiterated it was confident of a successful conclusion to the drawn-out takeover battle.
We consider the offer price to be adequate. The likelihood of a successful tender has considerably increased now, said DZ Bank analyst Thomas Maul.
Roche stock benefited from the fresh offer as investors anticipated the benefits of Genentech's promising medicines, rising 3.4 percent to 133.20 Swiss francs by 1035 GMT (6:35 a.m. EST).
European pharmaceutical stocks were also helped by news that Merck & Co Inc
Maul said Roche has a more than 75 percent chance of success at its new offer of $93 per share, since most shareholders will not want to risk not tendering in case key data on cancer drug Avastin, due in April, disappoints.
Genentech's shares gained some 11 percent on Friday and closed at $90.86.
The U.S. group has urged shareholders to take no action on the new offer at this time and said the special committee of its board would make a formal response promptly and explain the reasons for its position.
ROCHE STANDS TO GAIN
Analysts had generally agreed 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.
Morgan Stanley analysts believe the acquisition will go through, though timing and nature of the resolution are still unclear, and Roche investors stand to gain under almost any circumstances.
They said the average tender price will almost certainly be higher than $93 per share.
Andrew Weiss at Swiss bank Vontobel still thought $95 to $100 a share was a fair reflection of Genentech's value and Roche might have to up its bid again to get the deal done.
The improved offer will most likely jump-start negotiations between Roche and Genentech senior management, Weiss said.
Roche's improved bid and prolonged tender offer deadline, in our view clearly signal Roche intent to soon take Genentech private.
(Editing by Andrew Macdonald)