GLAXOSMITHKLINE EXTEND- ED its hostile takeover offer for Human Genome Sciences after failing to win control of the US biotechnology company with its $2.6 billion bid.
Shareholders will have until 5pm New York time on June 29th to tender their stock.
Glaxo said 474,029 Human Genome shares were tendered before the $13-a-share offer expired at midnight New York time on Thursday.
Human Genome, based in Rockville, Maryland, has 199.1 million shares outstanding.
Human Genome shares have traded above the offer price since Glaxo announced the proposed takeover on May 9th, signalling investors expect a higher bid. Glaxo went directly to shareholders of Human Genome after the company rebuffed its approaches, saying the bid was inadequate.
The “minuscule” number of shares tendered, less than 1 per cent of those outstanding, shows “there isn’t any interest in this offer at this level”, said Navid Malik, an analyst at Cenkos Securities in London.
“Glaxo has to raise their offer. That’s the only way forward.”
Buying Human Genome would give Glaxo full control over marketing Benlysta, a treatment for lupus. The companies share revenue and profits from the drug equally.
Experimental Drugs Glaxo and Human Genome are also collaborating on two experimental medicines that are in late-stage testing: albiglutide for diabetes and darapladib for hardening of the arteries.
Human Genome has the right to receive royalties of 10 per cent on sales of darapladib and 5 per cent on sales of albiglutide. Human Genome said on May 17th it’s in talks with “major” pharmaceutical and biotechnology companies about a potential transaction. “This process continues to be active and fully under way,” Human Genome said in a statement yesterday. “We are committed to completing our exploration of strategic alternatives as expeditiously as possible.”
The company has adopted a so-called “poison pill” shareholder rights plan to deter the hostile takeover. Such defences are engineered to make unwanted takeover bids prohibitively expensive. – (Bloomberg)
