It wasn’t quite the market response Genentech CEO Arthur Levinson was looking for.

Levinson and his team worked hard to make the bull case for the biotech group by providing long-term forecasts to prove it is worth far more than Roche is willing to pay. Yet Genentech shares still ended down 4.6 percent, or nearly $4, in line with a grim market on March 2.

Roche investors, by contrast, were in distinctly chipper mood on March 3, marking up the Swiss group’s stock by more than 5 percent. 

Why the skewed response? JP Morgan analysts put it down to the fact that positive news for Genentech is also good for Roche (after all, it already owns 56 percent of the U.S. business) and such news could actually have a bigger impact on the Swiss group because it trades on a much lower multiple.

“Most factors cited by Genentech to highlight the value of the business represent an even greater upside to Roche shareholders, as that upside could be leveraged outside the U.S. and should boost what is currently a much lower Roche valuation,” the brokerage’s analysts adds.

Ironically, one reason Roche lost some of its previous lustre was worry over its multibillion play for Genentech.  

Roche is attempting to acquire the 44 percent of Genentech it does not already own for about $42 billion, or $86.50 per share. Most analysts expect it to end up sweetening the offer to clinch the deal.

At the Geneva auto show, General Motors is getting down to the business of convincing European governments to pump state funds into its Opel/Vauxhall arm. Europe has long been considered one of the more profitable corners of the globe for GM. The company is talking about closing three plants there and warning officials that there will be liquidity problems at Opel/Vauxhall early in the second quarter if they don’t pony up.

Leveraging similar tactics it used in the U.S., GM is telling European leaders that the aid it needs — whatever the final price tag — will cost less than an Opel/Vauxhall failure. This is an argument likely to find more traction in Geneva than it did in Washington, where socialism is not a word used in polite company.

Meanwhile, the great race for global funding is picking up speed. Toyota, the world’s biggest auto company, is looking for dollars to keep its loan business competitive in the shrinking global auto market. Ford is again reported to be shopping Volvo in China. At speeds like these, avoiding a huge smash-up before the next big turn would be a miracle.

Deals News:

* Air France-KLM will launch a tentative bid for Czech Airlines (CSA) within weeks as European carriers regroup in the face of a downturn that so far shows no signs of easing, its chief executive said.

* Royal Dutch Shell said it plans to accept BG Group’s improved offer for its stake in Australian coal seam gas firm Pure Energy in the absence of a higher bid, helping the British firm move closer to a takeover.

* Bespoke furniture maker Smallbone said it is considering a sale of the company as its shares were suspended pending clarification on its funding.

* China Life has withdrawn from bidding for the Asian unit of embattled U.S. insurer American International Group over worries about its quality, chairman of the Chinese insurer said.

* First Solar said it would pay rival OptiSolar $400 million in stock for its pipeline of solar projects, including a major installation for California utility PG&E Corp and other nascent deals that will rapidly expand the company’s presence in the U.S. utility market.

* BCE Inc, Canada’s biggest telecom company, is moving to vastly expand its retail presence by buying electronics chain The Source from Circuit City Stores Inc for an undisclosed sum.

* Danish insurer TrygVesta A/S said it would buy Swedish peer Moderna Forsakringar for 810 million Danish crowns ($137.1 million).

(PHOTO: A worker cleans a Insignia type car at the exhibition stand of General Motors Corp’s (GM) German unit Opel during a preview day of the 79th Geneva Car Show at the Palexpo in Geneva March 2, 2009. REUTERS/Arnd Wiegmann)

Potential buyers of a large AIG business could be the latest to get some “relief” under the $700 billion Troubled Asset Relief Program (TARP).

In approving a revised AIG rescue package, the government has also agreed to give potential bidders of the insurer’s assets at least a bit of what some of them have been clamouring for – access to capital.

AIG has received significant interest from buyers for its aircraft leasing unit, International Lease Finance Corp, Chief Restructuring Officer Paula Reynolds said.

But despite the interest, the process is taking time as bidders look for the funds to pull off a deal. The company has $33 billion of debt, some of which starts to mature in October. It had a book value of about $7.5 billion as of Sept. 30.

Before AIG tanked in September, ILFC had it good, with access to the insurer’s blue-chip credit ratings. Now, the loss of those ratings along with the upheaval in capital markets would force any bidders for the unit to think carefully not only about how to finance the acquisition but also how to run it on an ongoing basis, not an easy task as the financial crisis persists.

But to potential bidders’ relief, AIG will consider using some of its new $30 billion equity commitment from TARP to help with ILFC debt that comes due this year, if – as a source with direct knowledge of the matter pointed out – that becomes an impediment to the unit’s sale.

(Photo: REUTERS/Eric Thayer)