UK-based pharmaceutical company GlaxoSmithKline (GSK) has extended its share offer for US biotech firm Human Genome Sciences (HGS), but has not increased it.
The company has extended its offer from the 7 June 2012 deadline to 29 June, after minimal shares were tendered. With GSK refusing to budge from its offer of $13 a share, just over 474,000 shares had been tendered by the original deadline.
GSK’s unsolicited tender offer for HGS, which values the company at around $2.6bn, is said by GSK to provide "immediate liquidity at a substantial premium, while eliminating further exposure to the significant execution risk inherent in HGS achieving its future growth objectives."
Whilst GSK reiterated its belief that now is the "appropriate time in the evolution of the GSK / HGS relationship for the companies to combine", the acquisition approach has threatened to sour what was previously considered a profitable relationship between the two companies.
GSK considers its offer to reflect the value of HGS’s drug portfolio, including Benlysta, darapladib and albiglutide, and the company’s operating and financial assets, whilst also contributing cost synergies of at least $200m.
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HGS, however, has continued to consider the offer as not representative of the company’s true value, with company officials alleging that GSK has waited for its share price to reach rock bottom before making its approach.
Prior to GSK’s takeover bid, launched in April 2012, the two companies had worked closely together for nearly 20 years, collaborating for the development of lupus drug Benlysta.
Image: GlaxoSmithKline’s headquarters, located in London, UK. Photo courtesy of: GlaxoSmithKline.