Genentech shareholders sue over Roche bid

By Martha Graybow

NEW YORK (Reuters) - A Genentech Inc DNA.N investor filed a lawsuit on Wednesday over the proposed $43.7 billion buyout by majority shareholder Roche Holding AG (ROG.VX), saying the bid is unfair and inadequate.

The suit, brought in Delaware Chancery Court, seeks to block the Swiss drugmaker's bid from going forward under its current terms. Roche has offered to buy all outstanding shares in Genentech, its U.S. partner, for $89 a share in cash to solidity its position in cancer medicines.

"It is clear that the proposed buyout is on unfair terms and shortchanges Genentech's shareholders," Steven Toll, a lawyer for the plaintiff, said in a statement.

Plaintiff Ira Gaines is an individual investor who holds Genentech stock, Toll said.

The lawsuit contends Roche's bid was timed to capitalize on general market turmoil and a decline in Genentech's stock price.

Both Genentech and Roche are named as defendants, as well as Genentech Chief Executive Arthur Levinson and other individuals. The lawsuit seeks class-action status on behalf of other Genentech shareholders.

The suit accuses Roche and the individual defendants of breaches of fiduciary duties to Genentech shareholders. It also seeks an injunction against the buyout proposal from being carried out in its current form.

A Roche representative said the lawsuit was "without merit."