UK-based pharmaceutical major GlaxoSmithKline (GSK) has completed its acquisition of US-based biotechnology company and collaborator Human Genome Sciences (HGS).
GSK completed the purchase, acquiring all outstanding shares in HGS for $14.25 per share. The acquisition cost stood at $3.6bn on an equity basis, or $3bn net of cash and debt.
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The offering period for GSK’s tender offer expired at 5pm EST on 2 August 2012, with 174,430,970 shares being validly tendered and not withdrawn during the initial and subsequent offering periods. The total number of shares purchased, including those already owned by GSK, represent approximately 87% of outstanding shares in HGS.
Owing to terms of the merger agreement, a wholly-owned subsidiary of GSK exercised its top-up option, taking the share ownership past 90% and triggering the completion of a short-form merger with HGS. All remaining shares of HGS common stock that had not been tendered were converted in the merger, with owners receiving $14.25 per share in cash.
The acquisition brings to an end GSK’s drawn-out pursuit of the company it collaborated with for the development of lupus drug Benlysta, a pursuit which saw the relationship between the two companies become increasingly fraught.
HGS originally resisted GSK’s advances, adopting a "poison pill" approach to defend itself from a takeover approach that company officials deemed to fall far short of the company’s valuation. Some officials even accused GSK of waiting for the company’s share price to hit rock bottom before making its approach.
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By GlobalDataImage: GlaxoSmithKline corporate headquarters, located in London, England. Image courtesy of GlaxoSmithKline
