Human Genome Sciences agrees to GSK's revised $3-bn offer
17 July 2012
US biopharmaceutical company Human Genome Sciences (HGS) yesterday agreed to be acquired by GlaxoSmithKline Plc (GSK) for a sweetened $3 billion (£1.91 billion) offer, ending the three-month hostility between long-time partners.
The two companies said yesterday that they have entered into a definitive agreement under which GSK will acquire HGS for $14.25 per share in cash. The transaction values HGS at approximately $3.6 billion on an equity basis, or approximately $3 billion net of cash and debt, and represents a premium of 99 per cent to the HGS closing price of $7.17 per share on 18 April 2012, the last day of trading before HGS publicly disclosed GSK's initial private offer.
The boards of directors of both companies have approved the transaction.
In April, GSK had offered $13 a share, a premium of 81 per cent to HGS's closing share price of $$7.17 on 18 April, the last trading day before HGS publicly disclosed GSK's private offer.
Rockville, Maryland-based HGS had rejected the offer saying that the buyout proposal did not reflect the value of the company, and hired Goldman Sachs and Credit Suisse to explore strategic alternatives, including a potential sale. (See: GlaxoSmithKline's $2.6-bn bid rejected by Human Genome Sciences)
In May, London-based GSK took its hostile takeover offer directly to HGS shareholders, which prompted HGS to adopt a shareholder rights plan or poison pill to thwart the British drug giant's takeover.