Human Genome rejects unsolicited takeover bid from GlaxoSmithKline

20 April 2012

US drugmaker Human Genome Sciences (Nasdaq: HGSI) revealed yesterday that it has rejected an unsolicited proposal from UK pharma giant GlaxoSmithKline (LSE: GSK) - and long-time partner for already marketed lupus drug Benlysta (belimumab) as well as other investigational drug candidates - to acquire HGS for $13.00 per share - around $2.59 billion in total - in cash.

HGS shares closed at $7.17 the prior day, with a market cap of $1.4 billion, but the stock leapt 99% to Human Genome's shares rocketed 99% to $14.30 in premarket trading Thursday morning, and rising as high as $15. The firm’s board believes the offer, which is an 81% premium to its closing price on Wednesday, does not reflect HGS’ inherent value, and has asked for additional information from GSK.

HGS also announced that its board of directors has authorized the exploration of strategic alternatives in the best interests of shareholders, including, but not limited to, a potential sale of the company. HGS has retained financial and legal advisors to assist in this process.

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