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GSK addresses Human Genome poison pill

by Laura Board  |  Published May 23, 2012 at 11:04 AM
GlaxoSmithKline plc Wednesday, May 23, tweaked the terms of its hostile $2.59 billion offer for Human Genome Sciences Inc. to address a poison pill mechanism its target put in place last week.

Human Genome's plan, implemented as it reiterated its rejection of the offer on May 17, dilutes holdings should a third party attempt to buy up 15% or more of its stock without the board's support.

GlaxoSmithKline said it has added a condition to its offer "requiring HGS 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 of HGS."

Human Genome, of Rockville, Md., rejected the London company's initially friendly, $13 per-share offer in April, instead hiring Credit Suisse Group and Goldman, Sachs & Co. to conduct a formal sales process.

GlaxoSmithKline, which has been a partner of Human Genome since 1993, declined to participate, and on May 9 took its offer directly to shareholders.

Disappointing sales of Human Genome's Benlysta -- the first new lupus drug to hit the market in more than 50 years and an expected blockbuster -- presented a buying opportunity for GlaxoSmithKline, whose target maintains the offer is opportunistic.

Human Genome stock Wednesday morning was trading down 14 cents at $13.86 on Nasdaq. The shares had traded between $25 and $30 during the first half of last year before falling below $8 immediately before GlaxoSmithKline made its bid proposal, which runs until June 7,

The U.K. company is taking financial advice from a Lazard team led by David Gluckman and Antonio Weiss, and Morgan Stanley's Clint Gartin and Susan Huang. A Cleary Gottlieb Steen & Hamilton LLP team including Victor Lewkow, Benet O'Reilly, Meredith Kotler and Kimberly Spoerri and a Wachtell, Lipton, Rosen & Katz team led by Adam Emmerich and David Lam are providing legal counsel.

Marc Gerber and Michael Rogan lead a Skadden, Arps, Slate, Meagher & Flom LLP team advising Human Genome, while Jay Smith and Jason Harmon of DLA Piper are also providing legal advice.

Goldman Sachs' Tim Ingrassia, Lorence Kim, Peter van der Goes and Vijay Manthripragada, along with Scott Lindsay, Charles Newton and Bob Murley of Credit Suisse, are HGSI's financial advisers.
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Tags: GlaxoSmithKline plc | GSK | HGS | Human Genome Sciences Inc.

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