In one of the more friendly spurnings of a buyout offer in recent months, Genentech (NYSE:DNA) yesterday called Roche's $89-per-share buyout offer too low, and very nicely implied that Roche should up its bid.

Three weeks ago, Roche bid $43.7 billion to acquire the 44% of Genentech shares that it doesn't already own. A special committee of Genentech's board of directors reviewed Roche's proposal and announced yesterday that Roche had made an offer that Genentech could refuse. Not a big surprise to investors, who had already pushed Genentech's shares well above the $89 mark.

Yesterday, Genentech's board said Roche's proposed deal "substantially undervalues" Genentech and that the board "would consider a proposal that recognizes the value of (Genentech)."

Genentech is no stranger to Roche buying it out. Roche did just that in 1999, and then spun Genentech back out onto the public markets later that same year for a healthy premium, which is how it has come to its majority ownership of Genentech.

There are several reasons why Roche would want to acquire all of Genentech in the near term. First of all, biopharmaceutical assets are worth a premium right now compared to their small-molecule peers, as other deals and potential deals -- like Takeda's buyout of Millennium Pharmaceuticals and Bristol-Myers Squibb's (NYSE:BMY) offer for ImClone Systems (NASDAQ:IMCL) this year -- have shown.

Secondly, because of its relationship with Genentech, Roche gets automatic first dibs on marketing rights to any Genentech drug that gets approved for sale outside of the U.S. This deal is set to expire in 2015, and Roche surely doesn't want to risk having to get into bidding wars against other big pharmas like GlaxoSmithKline (NYSE:GSK) for any future Genentech compounds developed in-house.

Genentech shares are up more than 20% since the last trading day before Roche's offer was announced. Its shares are already trading more than $9 above Roche's buyout offer, so investors clearly expect Roche to up its bid. The ball is in Roche's court.

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Fool contributor Brian Lawler does not own shares of any company mentioned in this article. The Fool has an A+ disclosure policy.