MID-DAY DEAL ROUND-UP

Genentech’s response to Roche Holdings’ $89 per share offer for the 44 percent of Genentech it doesn’t already own seems more designed to spur more discussions than shoo the bidder away, says the New York Times’ DealBook.

H.J. Heinz Co’s chief executive said on Wednesday that Campbell Soup Co would make a “nice fit” with the ketchup maker, although a Heinz spokesman declined to say whether such a combination had been seriously considered. Either way, TheDeal.com says, Heinz is in an acquisitive mood and looking into emerging market, following a path similar to that of Kraft Foods, General Mills and Kellogg.

Nortel’s acquisition of Bluesocket’s Pingtel subsidiary, which develops software to unify and streamline communications functions, like e-mail and instant messaging, is not the transformative acquisition people have been waiting for, writes www.thedeal.com.

OTHER DEALS OF THE DAY
**Chinese state oil firms are preparing bids for Petro-Tech Peruana, a privately-held oil company with offshore assets in Peru, which could fetch $1.5-$2.5 billion, sources with knowledge of the situation said.

** U.S.-focused consumer goods exporter Li & Fung said it will pay $330 million to buy U.S. handbag importer Van Zeeland to become a leading handbag supplier in the United States.

Biotechnology company Genentech Inc on Wednesday followed ImClone Systems Inc’s playbook by rejecting a takeover bid by its largest shareholder.

Genentech rejected an offer by Roche Holding AG to acquire the shares of the Genentech it did not already own, saying the the $89 per share offer undervalued the company. Roche said it believed its offer for Genentech was fair and generous.

The move mirrored ImClone’s comments earlier this month, when it called a bid by Bristol-Myers Squibb Co too low. Bristol offered to acquire the 83 percent of ImClone it doesn’t already own for $60 a share, and said it believed the proposal was “full and fair.”

Eric Schmidt, an analyst at Cowen and Co, viewed Genentech’s response a classic game of chess, saying “This is no surprise at all. People believe the company is worth more and that Roche can afford to pay more. The game of chess has begun.”

Arbitrageurs, who specialize in trading takeover stocks, said they viewed both deals as inevitable but some haggling over the price was to be expected.

“In both cases, you have the obvious buyer and partner. It’s just a matter of price,” said one arbitrageur who declined to be named.

CVS Caremark Corp is bolstering its position on the West Coast with its acquisition of rival Longs Drugs Stores Corp. The deal, announced on Tuesday, is worth $2.54 billion and will allow CVS to expand in states like California and broaden the reach of its prescription services. The acquisition of Longs’ 521 stores will also give CVS a leading position in Hawaii, where it doesn’t operate. CVS will pay $71.50 per share for Longs, including its Rx America subsidiary, a prescription benefits management services company with over 8 million members. Longs shares closed at $54.04 before the news on Tuesday, but surged nearly 30 percent in extended trading on the deal. Shares in CVS fell nearly 7 percent on the news.
GM chief Rick Wagoner says there’s significant interest in the auto maker’s planned sale of up to $4 billion of assets as it battles record losses and falling sales, but no deals are expected soon. General Motors Corp is struggling against an accelerating downturn in its home market and high oil prices that have hammered sales of its trucks and SUVs, triggering a $15.5 billion quarterly loss, the third-largest in its 100-year history. Earlier this month, sources told Reuters GM was in talks with India’s Mahindra & Mahindara Ltd and automakers in Russia and China about selling its Hummer brand.

A consortium led by Goldman Sachs Group Inc has agreed to pay about $1.5 billion for a number of ABN AMRO’s private equity assets, the Wall Street Journal said Wednesday. On Monday, Belgian-Dutch financial services group Fortis said that together with Britain’s Royal Bank of Scotland Group and Spain’s Banco Santander, it had sold a number of ABN AMRO private equity assets to a Goldman Sachs-led consortium. The Journal said Goldman’s investment comprised 32 European companies as well as roughly $450 million in capital to be invested in future deals.
Other deals of the day:

* Australia’s CSL Ltd, the world’s top maker of blood plasma products, is buying smaller U.S. rival Talecris Biotherapeutics Holdings Corp for $3.1 billion, to boost its presence in the fast-growing biopharmaceutical industry.

* Norwegian video-conference systems group Tandberg ASA, a $2 billion company, has been approached by a private equity player interested in preliminary talks on a potential takeover offer, Tandberg said.

* Royal Bank of Scotland has scrapped the planned sale of ABN AMRO’s Australia and New Zealand operations after a high profile suitor withdrew, and plans to integrate them with its existing businesses there.

* South Korea’s Shinhan Financial Group said it would combine its asset management unit with a joint venture with BNP Paribas, creating the country’s No. 3 asset manager.