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GSK extends $2.6 billion bid for Human Genome Sciences

Hostile bid of $13 a share now goes to June 29
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GlaxoSmithKline ($GSK) said it would and now it has. It extended its $2.6 billion hostile bid for shares of its partner Human Genome Sciences ($HGSI) by three weeks.

The original offer from GSK of $13 a share was set to expire last night, and since GSK has made it clear that it does not intend to just fold on this proposal, it pushed the deadline for investors to tender shares to June 29, the company says in an announcement today. Human Genome opposes the deal, saying it values the company far too cheaply, and has been urging shareholders to hold out until it can find a more rewarding alternative, even asking GSK to participate, The Wall Street Journal reports.

To make GSK's life more difficult in the process, Human Genome created a shareholder rights plan that would dilute the shares of all shareholders if one investor acquires more than a 15% stake. The idea of the so-called "poison pill" is to make it more expensive for GSK and so try to drive it away, or potentially up its bid.

Reuters recently cited unnamed sources saying that if it gets control, the U.K.-based GlaxoSmithKline intends to not just load the board with sympathetic directors, but to replace all the directors.

The two companies have been partners for 20 years and many in the industry expected that some day the two would tie the knot. No one really expected it to become such a bitter battle. But HGS has been adamant that its pipeline of antibody drugs and getting full ownership of the lupus drug Benlysta are worth a higher premium than GSK offered. Human Genome's shares ran as high as $30 a share a year ago. Still, while it has been saying others are interested, it has yet to bring a better deal to the table. 

- see The Wall Street Journal story
- get the GSK release

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HGS snubs $2.6B buyout offer from Benlysta partner GSK