HGS Bid Extended By GlaxoSmithKline

HGS LogoGlaxoSmithKline (GSK) has prolonged their proposition to acquire Human Genome Sciences (HGS) without increasing their $2.60 billion offer, after barely any shares were offered.

The UK drugs giant has delayed the expiration date to June 29th for their unsolicited tender offer to acquire all the remaining common shares of Human Genome Sciences at $13.00 each. The offer was formerly planned to expire on June 7th and by then just in excess of 474,000 shares had been tendered.

Even though the bid has been continually rejected by HGS’ board, GlaxoSmithKline maintains that the proposal “represents full and fair value and is in the best interests of both companies’ shareholders.”

The organisation also asserts that they provide “immediate liquidity at a substantial premium while eliminating further exposure to the significant execution risk inherent in HGS achieving its future growth objectives.”

GlaxoSmithKline added that the bid echoes the value of the two companies’ lupus drug Benlysta, in addition to the late-stage cardiovascular treatment darapladib and albiglutide, which are currently in Phase III for the treatment of type 2 diabetes, plus Human Genome Sciences’ operational and financial assets.  GSK “continues to believe that now is the appropriate time in the evolution of the GSK/HGS relationship for the companies to combine.”

HGS is still not happy with GSK’s offer, and noted that under 1% of their outstanding shares have been tendered to the GlaxoSmithKline bid.  The board of directors at HGS commented that their “exploration of strategic alternatives,” including a possible sale “continues to be active and fully underway.”

GlaxoSmithKline declined to participate in the evaluation, and management at HGS says that GSK seek to “circumvent, disrupt and prematurely end the company’s process to the disadvantage of HGS stockholders.”  Previously it was reported that GSK planned to gain backing from Human Genome Sciences shareholders to exchange the entire current board with 12 independent directors.

Shares in Human Genome Sciences are presently trading above GSK’s bid price.  The US biotech organisation, HGS, advised investors to reject the tender price on Friday, commenting that it was “inadequate and does not reflect the value inherent” in their company.

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