A shareholder of Human Genome Sciences is taking legal action against the biotech company’s board, requesting a US court to temporarily restrain the company from using a poison pill to block GlaxoSmithKline’s hostile takeover attempts.
HGS took the approach, which has provided investors with the right to buy more stock at a discounted price should one shareholder purchase 15% or more, in an attempt to fend off GSK‘s advances.
HGS shareholder Duane Howell filed the lawsuit on 25 May 2012, asking the court to block the board from invoking the tactic, arguing that the poison pill is holding the "company’s shareholders hostage to the board."
Lawyers representing the plaintiff have also alleged that unless the company’s board was stopped, shareholders would lose the chance to secure the price offered by GSK.
GSK has a long established working relationship with HGS, most notably including the two company’s collaboration on the lupus drug Benlysta, however GSK’s attempts to acquire the company have caused the relationship to deteriorate.
GSK had originally planned to take its offer, valued at $13 a share, directly to investors after the HGS board rejected it, labelling it as inadequate. HGS has since accused GSK of waiting for the company’s share price to reach rock bottom before launching such a bid.
The UK-based pharmaceutical major has since confirmed that it will not proceed with its share offer unless HGS dropped its poison pill, claiming that the company has no need to participate in the process as its takeover approach does not require due diligence.
