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Roche to Buy Rest of Genentech LOS ANGELES TIMES -- Roche Holdings Ltd. said Thursday it will exercise its option to buy the outstanding shares in Genentech for $4.2 billion, but has decided to allow the South San Francisco biotechnology company to continue operating independently.

The Swiss-based pharmaceutical company, which already owns 65 percent of Genentech stock, will pay $82.50 a share for the remaining shares. Then, if regulators approve the deal, it will raise more than $2 billion by selling up to 19 percent of the company back to the public.

Part of the deal will expand on Roche’s right to pick drugs from Genentech’s rich pipeline for co-development, but it will pay a premium for drugs near the end of testing in patients.

Genentech executives welcomed Roche’s decision to let the smaller company steer its own course in developing genetically engineered drugs. President and CEO Arthur D. Levinson said that the company is determined to remain independent and maintain a culture of innovation that is distinct from the atmosphere found at many large drug companies.

“It’s my emphatic belief that Roche is sincere in its efforts to allow this company to exist as an independent operation, and I honestly believe our future success is dependent on that,” Levinson said.

Analysts hailed the Roche move as brilliant -- and good for the health of a highly regarded, pioneering biotech company.

“Roche found a very smart way of having its cake and eating it too,” said Meirav Chovav, an analyst with Salomon Smith Barney.

The deal grew out of a 1990 merger agreement, revised five years later, that gives Roche the option of completing its takeover by the end of June of this year, at 82.

Walmart May Expand to Internet LOS ANGELES TIMES -- The United States’ largest retailer on Thursday denied a CNBC report that it would open a greatly expanded online retail site Friday that will directly confront such aggressive Internet interlopers as

“That report is completely inaccurate,” Wal-Mart Stores Inc. spokeswoman Melissa Brown said. “We’re always listening to our online customers, and we’re focused on meeting their needs, but we’ve not talked about anything like (the CNBC report).”

Speculation about how quickly Bentonville, Ark.-based Wal-Mart would upgrade its online business has grown in recent months as and other Internet retailers have expanded their online services and marketing budgets. Brown, however, declined to outline Wal-Mart’s online timetable: “During the coming year, we will have some exciting news to share about some significant changes in the way that we approach some of our (online) programs.”

The CNBC report prompted prices of online stocks to fall noticeably on Thursday, as investors apparently worried that the huge retailer is now ready to flex its muscles online. closed down $7.06 at $105.06 in Nasdaq trading.

In contrast, Wal-Mart finished up $1.13 at $45.50 in NYSE trading after Bank of Tokyo-Mitsubishi Ltd. reported that U.S. retail sales rose a larger-than-expected 6.8 percent during May. Wal-Mart’s May sales rose by 7.7 percent. CNBC’s report underscores growing tension between Wal-Mart, which is credited with reshaping the brick-and-mortar retail world, and