US firm Genentech has rejected an offer from Swiss form Roche to buy the remaining shares in the firm it does not already own for $43.7bn (£23.3bn).
Roche, which has been the majority owner of Genentech since 1990 and owns 55.9% of shares, offered $89 per share for the outstanding stock in July.
Genetech's rejection had been expected by analysts saying it was too low.
But the firm said it would consider an offer that reflects the "significant benefits" for Roche.
Genentech is the world's biggest biotechnology company by market value. A large part of its revenue comes from cancer related drugs.
It said Roche's offer "substantially undervalues the company".
"The special committee is confident in the company's strong financial and clinical momentum and its uniquely productive research and development capabilities," Charles Sanders, chairman of Genentech's special committee said.
Analysts said the rejection could be part of plans of Genentech to elicit a higher offer from Roche.
"It may take some time, but I fully anticipate this to go through," said Jason Zhang, an analyst with BMO Capital Markets, arguing that $104 a share is a more likely price.
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