18. May 2012 12:29
Human Genome Sciences (HGS) has told its shareholders not to accept GSK’s hostile $13 per share tender offer.
Its Board of Directors insist the $2.6bn offer is inadequate, undervalues the company and is not in the best interests of HGS or its shareholders.
H. Thomas Watkins, HGS President and CEO, said its Board “has concluded unanimously” that the offer “does not reflect the value inherent in Human Genome Sciences”.
HSG rejected GSK’s initial takeover approach towards the end of April, forcing the pharma company to go back and target the company’s shareholders.
In the meantime, HGS instructed Wall Street advisors to search for potential suitors as part of a strategic review process – something GSK refused to participate in.
On reaching its recommendations to shareholders, HGS’s Board considered numerous factors.
Its Directors decided that its main product Benlysta – which it is in partnership with GSK – has “substantial growth opportunities” and pointed towards HGS’s “substantial financial assets”.
GSK were also accused of “opportunistically” capitalising on recent share price dislocation and capturing for itself the “significant upside opportunity for upcoming value-driving products”.
“The HGS Board of Directors has determined that the GSK offer is not in the best interests of our stockholders and recommends that they not tender shares to GSK,” said Mr Watkins.