HGS refuses GSK unsolicited offer, considers alternatives
Human Genome Sciences has refused GlaxoSmithKline’s unsolicited offer on April 11 proposing to acquire all of the outstanding shares of HGS for $13.00 per share in cash ($2.6 billion), an 81% premium to closing share price on April 18.
"This offer reflects full and fair value for Human Genome Sciences and the synergies inherent in this combination,” said Sir Andrew Witty, CEO of GSK. “It also eliminates substantial execution risk for Human Genome Sciences shareholders and delivers immediate and certain value that is superior to what we believe Human Genome Sciences can reasonably expect to create as a standalone company.”
The HGS board of directors, in consultation with independent financial and legal advisors, has carefully reviewed and considered the GSK offer and has determined that the offer does not reflect the value inherent in HGS.
"We are disappointed that Human Genome Sciences has rejected our offer without discussion and are confident that our offer is in the best interest of shareholders of both companies,” said Sir Andrew.
However, HGS announced on April 19 that its board of directors has authorized the exploration of strategic alternatives in the best interests of shareholders, including, but not limited to, a potential sale of the company. GSK has been invited to participate in this process and HGS has requested additional information regarding investigational products in GSK’s clinical pipeline to which HGS has substantial financial rights, including darapladib, currently in phase III development for the treatment of cardiovascular disease, and albiglutide, currently in phase III development for the treatment of type 2 diabetes.
There can be no assurance that any transaction will occur or if so on what terms. HGS does not intend to discuss the status of its evaluation unless and until a specific transaction has been approved.
The day after GSK made its offer, HGS's stock rose 97.6%, closing at $14.17, with more than 126 million shares changing hands.