ROCHE, THE Swiss pharmaceuticals giant, took the rare step yesterday of denying a market rumour that it had offered to buy the troubled pharmaceuticals unit of Bayer, the German chemicals group, for $ 20bn (pounds 14bn).

The strongly worded rebuttal followed a 3 per cent fall in Roche's share price during early trading, on the back of a story from Reuters about the possible bid. Bayer's shares, still reeling following the sudden withdrawal earlier this month of its Baycol anti-cholesterol drug, gained more than 5 cent on the back of the report. Baycol, marketed as Lipobay in the UK, has been linked to 52 deaths.

Roche said: "As a general rule, Roche does not comment on market rumours. However, in this case to avoid the spread of further speculation generated by the detailed comments of unknown sources, Roche is stating that this rumour has no basis in fact. Roche has not held talks with Bayer about an acquisition nor agreed on a meeting with Bayer."

Reuters, however, stood by its story.

Bayer has stoked speculation surrounding its drugs division with comments that it has had expressions of interest from two major pharmaceutical firms. GlaxoSmithKline, the world's largest drugs company, is apparently mulling an offer although it has not engaged external advisers.

Analysts value the unit at between $ 15bn and $ 27bn. Few expect Bayer to decide on the future of the unit before a board meeting on 13 September. Yesterday it said it could make a decision by next month.