PHARMACEUTICAL mammoth GlaxoSmithKline (GSK) has acquired Human Genome Sciences (HGS) in a friendly $3bn (£1.9bn) cash offer, following months of hostile pursuit.
The sweetened offer of $14.25 per share is a premium of 99 per cent over HGS’s undisturbed share price.
HGS had previously rejected as insufficient an offer of $13 per share, which valued the company at just under $2.6bn.
But the British behemoth ended up persuading its long-time partner to sell out, in a tie-up that is expected to achieve $200m cost savings by 2015.
“We are pleased to have reached a mutually beneficial agreement with HGS on friendly terms and believe the combination of GSK and HGS represents clear financial and strategic logic for both companies and our respective shareholders,” said GSK chief executive Sir Andrew Witty.
Both Witty and the boss of HGS, H Thomas Watkins, pointed to Benlysta, the blockbuster lupus drug, as a major reason for the deal.
“HGS has had a long and productive working relationship with GSK, and together we will be uniquely positioned to achieve the full potential of Benlysta for the benefit of those battling serious disease around the world,” Watkins commented.
GSK will also get full ownership of albiglutide and darapladib, experimental medicines for diabetes and heart disease in the later stages of development.
ADVISERS MORGAN STANLEY, LAZARD, GOLDMAN SACHS, CREDIT SUISSE
MANAGING DIRECTOR, MORGAN STANLEY
GLAXOSMITHKLINE took advice from Lazard and Morgan Stanley throughout its multi-billion dollar acquisition of Human Genome Sciences.
The Morgan Stanley team was made up of Clinton Gartin, Thomas Sheehan, Susan Huang, Steven Harr and Ari Terry, all managing directors.
Although a Morgan Stanley spokesperson said the bank’s culture was more about teamwork than individual stars, Clinton Gartin has long been the bank’s rainmaker in the sector, thought to be involved in more than $110bn of healthcare deals in 2009 alone.
Gartin advised on both US drugmaker Pfizer’s $68bn capture of rival Wyeth, and Merck’s $46bn reverse merger with Schering-Plough.
The Lazard team was led by Antonio Weiss and David Gluckman, the latter a former physician and co-founder of the firm’s biotechnology practice.
Glaxo’s legal advisers were Cleary Gottlieb Steen & Hamilton, and Wachtell Lipton Rosen & Katz.
Human Genome Sciences took financial advice from Goldman Sachs and Credit Suisse, and for legal advice it turned to Skadden Arps Slate Meagher & Flom.