Don't sell your Genentech (DNA) stock just yet

A major obstacle for Roche and Genentech has been the concern that there could be a "brain drain" if Genentech loses its entrepreneurial character.

The company has long been viewed as a great place to work because of the ability of its scientists to do independent research, as well as because of the great perks and stock bonuses paid out to employees.

A recent report of the 100 best places to work in the United States placed Genentech at No. 5.

Competing companies in the bioscience field have long been lusting after Genentech superstars. There are indications that several companies are prepared to make attractive offers to previously loyal Genentech employees, and that there may be a receptive ear if those employees are not convinced of the sincerity of Roche's commitment to retaining the environment at Genentech.

As a further indication that the deal is likely to go through, the two companies have reached an agreement on a retention plan for Genentech employees. The plan would provide for cash bonuses in lieu of stock, acceleration of stock options and enhanced cash severance.

DNA closed at $86.74 yesterday. Roche is likely to increase its offer to at least $95, and some speculate the bid could exceed $100, perhaps as much as $110.

At $95 per share, the Roche offer would amount to about $50 billion. Genentech has cash reserves of $10 billion, and Roche would likely have to borrow a minimum of $35 billion to complete the transaction at this level.

While this could be an obstacle in the current credit environment, the recent pick-up in activity in the corporate bond market suggests that companies with the credit quality of Genentech (AA at S&P and A1 at Moody's) and Roche should have little difficulty raising the cash for the deal.

Louis Navellier's PortfolioGrader Pro, which offers free ratings for nearly 5,000 Wall Street stocks, rates DNA an A or Strong Buy.

Jamie Dlugosch is a contributor to InvestorPlace.com.