Human Genome adopts Rights Plan to thwart GSK hostile takeover

18 May 2012

US biotech company Human Genome Sciences (Nasdaq: HGSI) said yesterday that, after carefully reviewing US drug giant GlaxoSmithKline’s (LSE: GSK) unsolicited $13 a share ($2.6 billion in total) tender offer to acquire the company (The Pharma Letter May 9), its board of directors has unanimously determined that the bid price is inadequate, undervalues the company and is not in the best interests of HGS and its stockholders.

Additionally, HGS announced that its board has adopted a Stockholder Rights Plan - or “poison pill” – to thwart GSK’s attempts, and declared a dividend of one share purchase right for each share of HGS’s common stock held of record at the close of business on May 29, 2012.

The Rights Plan, which has a term of one year, is intended to allow the company to fully engage in its strategic review process and as a means to protect the long-term interests of HGS’ stockholders. 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.

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