It was revealed on Thursday that Human Genome Sciences
) is in talks with, in its own words "major" pharmaceutical and
biotechnology companies in a bid to do whatever it can to avoid a
hostile takeover by GlaxoSmithKline (NYSE:
It's a fascinating period of time for HGSI, who claim to have
entered into confidentiality agreements with a number of unnamed
parties, and is currently providing opportunities to enter into
due diligence reviews.
reported last week
GSK made an initial $2.6 million tender offer after HGSI turned
down a takeover approach.
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.
Also, the situation is mildly awkward due to the fact that the
two companies are currently working together to develop two
medicines. So the fact that HGSI is seemingly prepared to
anything to avoid entering into a deal with GSK will only serve
to exacerbate that awkwardness.
Despite the HGSI board voting unanimously in favor of turning
down the GSK $2.6 billion offer, Glaxo doesn't seem to be keen to
take no for an answer, stating on May 9 that it would be
proceeding with the bid by offering $13 per share in cash
directly to shareholders.
Human Genome does seem to want to proceed with a deal, but it
will not be bullied and analysts are predicting that a deal will
get done for a fee in the region of $15 per share. While the
company's attempts to find another buyer may be little more than
a healthy game of hardball, GSK will do well to realize that they
won't be getting Human Genome on the cheap.
"The rights plan will not prevent any offers or transactions
that the board determines to be in the best interest of HGS and
its stockholders," the company said today in a separate
The rumblings don't seem to be doing anything to disrupt HGSI,
as it rose 1.1% to $14.41 on Thursday morning. The shares had
actually gone down 76% since 2011 before the GSK offer went
public. On the other hand, Glaxo went down 0.3% to 1,417 pence in
"The board believes that GSK acted to take advantage of the
company's depressed stock price levels," Human Genome said.
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