It was revealed on Wednesday that GlaxoSmithKline (NYSE:
) is looking to make a hostile takeover move for Human Genome
), making an initial $2.6 billion tender offer this week after
HGSI turned down a takeover approach.
Not it seems that GSK is taking matters into their own hands
and going for the hardline approach. GSK aims to offer $13 per
share in cash, which represents 81% more than HGSI's April 18
closing price, according to GSK in a statement.
The situation is mildly awkward due to the fact that the two
companies are currently working together to develop two
medicines. HGSI is currently looking into alternatives to GSK's
offer as it feels that it is too low and it has invited GSK to
participate in that review. GSK has, perhaps unsurprisingly,
turned down that offer as it hopes to show shareholders that it
is committed to pushing forward with its own offer.
Oh, to be a fly on the wall in those labs. Perhaps the lab
technicians, chemists and the like can shut the politics out. But
we like to think that it is kind of like working with your
ex-wife, the day after the divorce hearing. Even Rajesh Varma,
who ménages 5 billion euros for HGSI shareholder DNCA Finance SA
in Paris, said that, "It will probably be a long, drawn-out
GSK's hostile takeover bid comes hot on the heels of a similar
move by Roche Holding AG for Illumina (NASDAQ:
) in January, though that was abandoned last month. However,
April saw AstraZeneca (NYSE:
) agree to buy Ardea Biosciences (NASDAQ:
) for $1.3 billion.
GSK's offer for HGSI became public knowledge in April, with
HGSI shares falling 76% from the company's peak in 2011. It is
certainly a generous offer, no matter the noises coming out of
HGSI, valuing that company at 11 times the estimated 2012
"Shareholders should have the opportunity to decide for
themselves on the merits of the offer," Glaxo said.
GSK also said that the offer is "full and fair", allowing HGSI
shareholders the opportunity to sell immediately.
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