US biotechnology company Human Genome Sciences Inc (HGS) yesterday adopted a shareholder rights plan or poison pill after rejecting a $2.6-billion hostile takeover from British drug giant GlaxoSmithKline Plc (GSK).
The Rockville, Maryland-based company said that the rights plan will be triggered if a third party buys 15 per cent of the company's stock, which will allow its board to prevent any offers or transactions that it determines are not in the best interest of the company's shareholders.
The move comes after London-based GSK said that it will take its $13 a share offer for HGS directly to shareholders after having being rejected by the biotechnology company last month. (See: GlaxoSmithKline goes hostile with its $2.59-bn bid for Human Genome Sciences)
HGS, which is GSK's partner on two drug developments, had rejected the UK firm's takeover offer saying that it was an opportunistic move to capitalise on the company's depressed share price, which fell over 70 per cent before GSK made its initial approach on 19 April.
It said it had been advised by its financial advisors Credit Suisse Securities and Goldman Sachs that, "the offer was inadequate from a financial point of view" to its shareholders.
It, however, added that it had started to explore strategic options, including a potential sale.