Glaxo warns it will drop $2.6bn bid unless poison pill removed
GLAXOSMITHKLINE (GSK) said yesterday it would not proceed with its $2.6bn (£1.7bn) offer for Human Genome Sciences unless the US biotechnology company dropped a “poison pill” shareholder rights plan imposed to block the deal.
Human Genome adopted the stockholder rights plan earlier this month in an attempt to ward off GSK in what is becoming an increasingly acrimonious battle between the companies that together sell new Lupus drug Benlysta. The British company is taking its $13-a-share offer direct to investors after Human Genome’s board said it was inadequate.
The plan allows shareholders to buy additional shares at a discount if one investor buys or launches a tender offer for more than 15 per cent of the group’s stock without the board’s approval, effectively blocking an unwanted bidder.
“Because Human Genome has adopted a poison pill, GSK has added a condition to its offer requiring Human Genome to redeem the pill or, alternatively, GSK being satisfied in its reasonable judgment that the pill has been invalidated or is otherwise inapplicable to GSK’s acquisition,” GSK said yesterday.