British drugmaker GlaxoSmithKline Plc (LON:GSK) said it had added as a condition to its USD13.00 (EUR10.35) a share hostile takeover offer for Human Genome Sciences (NASDAQ:HGSI) the request that the board of the US biopharmaceutical firm abandoned the poison pill adopted to block a takeover.
HGS announced on 17 May a poison pill with a 15% trigger and one-year term, to allow the company to fully focus on its strategic review process and to protect shareholders against unsolicited takeover attempts.
GSK decided to take its offer directly to shareholders after HGS’ board turned it down last month as too low.
The British group announced on May 9 it would not take part in HGS’s review of strategic alternatives as invited and would instead launch its tender offer to allow HGS shareholders the chance to appreciate the merits of the offer themselves.
The offer was kicked off on May 10 and will run until June 7, valuing the target at some USD2.6bn.
According to HGS’ board the bid fails to reflect the value inherent to the company’s assets, operations and growth opportunities, including the upside potential represented by its pipeline.
The board advised shareholders not to tender their shares to the bid which it had deemed inadequate and undervaluing the company.
GSK has said it expected the takeover to serve its growth plans which include simplifying the business model, boosting R&D returns and deploying capital in a disciplined manner.
The British buyer is advised by Lazard Ltd (NYSE:LAZ), Morgan Stanley (NYSE:MS), Cleary Gottlieb Steen & Hamilton LLP and Wachtell, Lipton, Rosen & Katz.
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