GSK raises bid for Human Genome Services
pharmafile | May 9, 2012 | News story | Research and Development, Sales and Marketing | GSK, Human Genome Services, bid, takeover
The latest round in GlaxoSmithKline’s attempt to take over Human Genome Services has begun with GSK appealing directly to the US firm’s shareholders.
Last month GSK launched a takeover bid for the Maryland-based company, valuing it at around $2.6 billion, but was rebuffed by the board which indicated it wanted a higher offer.
GSK is now starting a tender offer to acquire all of the outstanding shares of HGS for $13 each in cash – a figure 81% higher than the closing share price of $7.17 before last month’s offer became known.
The gloves are not quite off in this fight – GSK insists it wants to conduct the transaction “on a friendly basis in a timely fashion” – but GSK’s intentions could not be clearer.
“There is clear strategic and financial logic to this combination and HGS shareholders should have the opportunity to decide for themselves,” a GSK spokesman said.
The two firms already have close links, launching their co-developed lupus treatment Benlysta last year and collaborating on two further drugs – darapladib for the hardening of the arteries, and albiglutide for diabetes and heart failure.
But Benlysta produced disappointing sales in its first year, a factor largely responsible for a 76% drop in HGS’s share price since then.
Rejecting GSK’s offer in April, the HGS board invited the manufacturer to join a process looking at ‘strategic alternatives’ for HGS.
It also requested more data on the progress of darapladib and albiglutide to assess their value before approaching other buyers – something which GSK says it has given HGS.
Whatever the toing and froing beforehand, the tender offer announced this week signals that GSK has no interest in doing anything other than buying HGS.
It says the four weeks since the original offer, plus the 20 business days that GSK’s tender must remain open: “provides a reasonable amount of time for HGS to complete its review of alternatives”.
In a statement GSK said: “Now is the appropriate time in the evolution of the GSK/HGS relationship for the companies to combine and…GSK is uniquely positioned to deliver on the promises of Benlysta, albiglutide and darapladib.
“GSK remains willing to meet and review its offer with HGS at any time,” the company’s statement continues.
“[GSK] will do fantastically well out of this – at $13 it is a steal,” Mark Evans, fund manager at Taube Hodson Stonex – which has a stake in HGS – told Reuters. “I still think it is very likely that they will have to pay more.”
HGS’s portofolio also includes ABthrax (raxibacumab) for treating inhalation anthrax, 20,000 doses of which have been delivered to the US Strategic National Stockpile for use in the event of an emergency.
Adam Hill
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