Roche threw us a curveball this morning and took its bid for Genentech (DNA, $80.95, down $3.14) directly to the shareholders. The company is now offering about $42 billion, or $86.50 a share for Genentech which is $2.50 less than the offer it made last July. Hogwash.

Roche’s attempt to get Genentech at a lower bid is another slap in the face to its shareholders and although Genentech has not made any comments, this camp says Genentech again holds out for more. One top 10 Genentech shareholder is already rebuffing Roche’s new bid and I don’t believe other shareholders will tender the offer either.

From the head brass at Roche: “We are disappointed that the discussions over the last six months between Roche and the special committee of Genentech have not produced a negotiated agreement. We feel it is now time to give the Genentech minority shareholders the opportunity to decide on our offer. Especially in the current market environment the offer provides an opportunity for all public shareholders to achieve liquidity and to receive a fair price for all their shares.”

Fair price? Geez. If Roche offered $89 back in July, why then, the lower offer? Genentech expects to report results in mid-April for its Avastin colon cancer trial, in addition to pending FDA decisions to expand the drug’s use. Roche is trying to get the rest of the company it does not own before that data is released.

We will have to see how this plays out but continue to hold the the February 95 calls (DWNBS, $0.05, down $0.15) and the March 95 calls (DWNCS, $0.25, down $0.35). These positions got hammered today as a result of the lower bid.

I’ll be back over the weekend to provide an update in the Weekly Wrap.

Rick Rouse