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GlaxoSmithKline Goes Hostile in Bid for Human Genome Sciences


UK drug maker holds steady with $13 per share offer, but biotech company's stock is still higher on hopes for a better price.

MINYANVILLE ORIGINAL GlaxoSmithKline (GSK) launched a hostile bid for Human Genome Sciences (HGSI) Wednesday, three weeks after the biotech spurned a $2.6 billion takeover offer. Human Genome also put itself up for sale in April after rejecting Glaxo's $13 per share cash offer. Glaxo, which collaborates with Human Genome on drug development, made it clear Wednesday it doesn't want to be part of an auction.

Glaxo "will not participate in Human Genome Sciences' strategic alternatives review process and will instead commence a tender offer this week to acquire all of the outstanding shares," the UK drug maker says in a statement.

Glaxo didn't raise its offer and Human Genome investors are hardly going to accept that low a bid. Human Genome's stock is already trading higher even with a dip in the stock. The company's shares fell 2% to $14.37 in early-morning trading Wednesday. Glaxo says its offer is a more than 80% premium to Human Genome's stock price before the takeover talk was made public. Good luck with that argument.

Sales of Human Genome and Glaxo's lupus drug Benlysta (approved last year) have been slower than expected. By taking over Human Genome, Glaxo would gain full rights to that drug and treatments in development.

(See: Human Genome Sciences Rejects GlaxoSmithKline's $2.6 Billion Takeover Offer.)

Twitter: @brettchase

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