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Home » GSK to acquire Human Genome Sciences for $14.25 per share in cash

GSK to acquire Human Genome Sciences for $14.25 per share in cash

July 16, 2012
CenterWatch Staff

GlaxoSmithKline and Human Genome Sciences have announced a definitive agreement under which GSK will acquire HGS for $14.25 per share in cash.

The transaction values HGS at approximately $3.6 billion on an equity basis, or approximately $3 billion net of cash and debt, and represents a premium of 99% to the HGS closing price of $7.17 per share on April 18, 2012, the last day of trading before HGS publicly disclosed GSK’s initial private offer. The boards of directors of both companies have approved the transaction.

The companies said the transaction is aligned with GSK’s long-term strategy of delivering sustainable growth, simplifying GSK’s business model, enhancing R&D returns and deploying capital with discipline.

GSK will acquire complete ownership of BENLYSTA, albiglutide and darapladib, allowing it to simplify and optimize R&D, commercial and manufacturing operations to advance these products most effectively and efficiently while securing the full potential long-term value of the assets. GSK expects to achieve at least $200 million in cost synergies to be fully realized by 2015, subject to appropriate consultation, and expects the transaction to be accretive to core earnings beginning in 2013.

“We are pleased to have reached a mutually beneficial agreement with HGS on friendly terms and believe the combination of GSK and HGS represents clear financial and strategic logic for both companies and our respective shareholders,” said Sir Andrew Witty, CEO of GSK. “The transaction meets GSK’s strict financial criteria for acquisitions, and we expect will deliver significant returns over the long term. This is a natural next step in our nearly 20-year relationship with HGS, and we look forward to working with HGS to integrate our businesses and to realizing the full value of BENLYSTA, albiglutide, and darapladib for the benefit of patients and our shareholders.”

“After a thorough analysis of strategic alternatives, HGS has determined that a combination with GSK is the best course of action for our company and the best way to maximize value for our stockholders,” said H. Thomas Watkins, president and CEO of HGS. “HGS has had a long and productive working relationship with GSK, and together we will be uniquely positioned to achieve the full potential of BENLYSTA and other products in our pipeline for the benefit of those battling serious disease around the world.”  

GSK has amended its pending tender offer to increase the price to $14.25 per share and to extend the expiration to midnight, New York City time, July 27, 2012. As of the close of business on July 13, approximately 427,042 shares had been tendered and not withdrawn, pursuant to the offer. The offer is subject to customary conditions as set forth in the Merger Agreement being filed with the SEC.

 

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