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GSK declines to take part in HGS tender process

Human Genome Sciences sets deadline of July 16 for offers

Human Genome Sciences (HGS) has set a deadline of July 16, 2012, for bids to acquire its business, and has urged participation in the tender process by GlaxoSmithKline (GSK), which is mounting a hostile takeover bid for the firm.

GSK swiftly rejected the request, however, saying on Friday that there is no need to take part "given the company's offer is not conditioned on due diligence or financing and can be completed expeditiously".

HGS is trying to get GSK to improve its current $13.00 per share offer, which has been rejected by HGS' board of directors, and proffer "final bid terms" by the new deadline.  The US biotech has not disclosed the identity of any other interested parties.

The pharma giant said it its preference "has always been to complete a transaction on a friendly basis in a timely fashion," and that it "remains willing to meet and review its offer directly with HGS at any time".

Earlier this month GSK extended its own deadline for the $2.6bn bid to take control of HGS to June 29 - reportedly after amassing less than 1 per cent of HGS' outstanding shares by its earlier deadline - but has consistently declined to raise its offer.

Shares in HGS are currently trading at around $13.19, having been a little above $7.00 level before GSK's offer was first announced back in April, 2012, well short of their 52-week high of around $30.

GSK is also said to be attempting to replace certain HGS' board members with its own candidates, as the US firm's bylaws include a provision to allow a change in board control without a general meeting.

In turn, HGS has been implementing a number of defensive measures to try to thwart the hostile takeover, including a shareholder rights plan that would trigger if GSK's stake in the firm rose above 15 per cent.

HGS has worked with GSK for years on a number of drugs, including lupus erythematosus treatment Benlysta (belimumab) which was approved in the US in March 2011 and was HGS' first commercialised drug.

The two firms are also working together on Lp-PLA2 inhibitor darapladib, which is in phase III testing for acute coronary syndrome, as well as albiglutide, currently in phase III development for the treatment of type 2 diabetes.

18th June 2012

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