Glaxo goes hostile in HGS takeover

9th May 2012 07:10

GlaxoSmithKline has taken an offer of 13 dollars a share directly to the shareholders of Human Genome Sciences (HGS).In April Glaxo made an offer to purchase US biopharmaceutical firm HGS, but saw its bid 'rejected without discussion'. HGS replied that the UK pharmaceuticals giant had made an offer that did not reflect the "value inherent in the company". HGS's board then authorised a review of its strategic options which include the sale of the company, with Glaxo being one of the firms invited to offer itself as a potential buyer.However, on Wednesday Glaxo said it would not participate in the review and instead made the offer, which it said represented a premium of 81% to HGS's closing share price of $$7.17 on 18th April, the last trading day before HGS publicly disclosed GSK's private offer."GSK continues to believe that now is the appropriate time in the evolution of the GSK/HGS relationship for the companies to combine and that GSK is uniquely positioned to deliver on the promises of Benlysta, albiglutide and darapladib," the firm said. "GSK values the long relationship it has with HGS and has clearly stated its preference to complete a transaction on a friendly basis in a timely fashion," it added."GSK remains willing to meet and review its offer with HGS at any time."The firm tried to woo HGS' shareholders, saying its offer represented "immediate liquidity at a substantial premium while eliminating further exposure to the significant execution risk inherent in HGS achieving its future growth objectives".