Roche Holding AG (RHHBY) decided to launch its $86.50-a-share tender offer for the 44% of Genentech Inc. (DNA) that it didn't already own after reaching an impasse with an independent board that was valuing Genentech at $112 a share.

In documents filed with the Securities and Exchange Commission late Monday, the Swiss drugmaker gave details of its interactions with Genentech since its rejected $89-a-share offer in July. Roche also disclosed that it plans to exercise its option to hold a majority of the seats on Genentech's board.

Despite showing that it is willing to play hardball in the negotiations, Roche said that it remains open to holding discussions with the special committee of Genentech's board in order to reach an agreed-upon price.

Officials from Genentech weren't immediately available for comment.

Genentech shares closed Monday down 30 cents, or 0.4%, to $82.70, below Roche's current offer. The stock hasn't traded above the original July offer of $89 a share since September because of doubts that Roche could finance the deal. American depositary shares of Roche added 67 cents to $31.87.

In August, a Genentech independent board rejected Roche's original offer. In late January, after months of failed negotiations, Roche brought the issue to shareholders with a lower tender offer price.

In Monday's filing, Roche described how it was frustrated by delays in the talks and that it disagreed with a model of future financial projections - provided by Genentech and its advisor, Goldman Sachs Groups Inc., in November - which it felt was prepared "in order to persuade Roche to increase the $89 per share proposal."

Furthermore, Roche refused to withdraw its offer and "simply continue the existing relationship where [Genentech] operates with substantial autonomy despite Roche's majority ownership."

Genentech and Goldman Sachs finally proposed a valuation analysis to Roche in December with a range of $112 to $115 a share, but indicated that the Genentech independent committee would accept a price of $112 a share.

Roche described the two parties' disagreement as being over where to begin negotiations, either at $89 from Roche's view or at $112 from the Genentech independent board's. Days later, Roche launched its tender offer.

The company reiterated that the lower $86.50 offer comes as change in the economy and credit markets have altered expectations for future cash flows and "key valuation assumptions and estimates," which translates to a decreased valuation for Genentech and other biotechnology companies relative to historical levels.

Roche reiterated that the tender offer, which expires March 12, reflects its majority control of Genentech and that no change-of-control premium should be paid for the minority shares.

As part of its valuation, Roche's advisor, Greenhill & Co., analyzed 24 transactions valued at more than $1 billion each since 2003 in which the buyer owned more than 50% of target, while seeking to buy 25% to 50% of the outstanding shares.

Separately, Roche said that it plans to increase the size of Genentech's board of directors and to fill the vacancies with its nominees in order to achieve proportional representation of its ownership.

Roche has had the right to make such a move since 1999, but currently only has three of the seven members of the board.

-Thomas Gryta; Dow Jones Newswires; 201-938-2053; thomas.gryta@dowjones.com