Roche Holding AG (ROG.VX) Monday said it still plans to pay a higher dividend this year, rejecting a press report that suggested the Swiss drugmaker may scrap the payout to finance its planned takeover of the shares it doesn't already own in U.S. biotech company Genentech Inc. (DNA).

Roche, based in Basel, said it plans to raise its dividend each year over the next three years, starting from 2008, when the statements were made. "Our dividend policy remains unchanged," spokesman Daniel Piller told Dow Jones Newswires.

The company's shares opened lower Monday amid concern Roche won't pay any dividends this year - worries fueled by a report in the Financial Times Saturday suggesting the drugmaker plans to raise its bid for Genentech.

At 0830 GMT, Roche was down CHF3.00, or 1.8%, at CHF168.90, underperforming the Swiss market and the broader European healthcare sector, which were down 0.8% and 0.9%, respectively.

The FT report said Roche has financing in place to buy the 44% of Genentech it doesn't already own. The article suggested Roche is thinking about raising its offer to $95 a share from the current $89 which Genentech has rejected as too low. Roche declined to comment on the report.

Roche's planned takeover, launched in July, has since stalled amid turmoil in financial markets. Frozen credit markets have hampered efforts to raise the $44 billion to $53 billion that Roche needs to complete a deal, said Sachin Jain, analyst at Merrill Lynch, in a note to investors. He has a buy rating on Roche.

The FT report said Roche is about to sign a $10 billion revolving credit facility, and has agreed on a longer-term facility for up to $25 billion with a syndicate of 10 banks. The article suggested that the funds may be raised at 4%, which, if true, would be "highly attractive" terms, Merrill Lynch's Jain said.

Company Web Site: http://www.roche.com

-By Anita Greil, Dow Jones Newswires; +41 43 443 8044 ; anita.greil@dowjones.com

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