LONDON GlaxoSmithKline's (GSK.L) $2.6 billion offer for Human Genome Sciences HGSI.O undervalues the biotech company, according to Taube Hodson Stonex, a leading investor in the U.S. group.
"The price that's been offered, although it is a big premium to where the shares were trading, is not high enough," said Mark Evans, a fund manager at Taube, which is the sixth largest investor in Human Genome with a 5.6 percent stake.
GSK, Britain's biggest drugmaker, says its $13 a share offer is "full and fair" and it is the only obvious owner for the U.S. firm, given the long-term partnership between the two companies.
But Evans said GSK was trying to buy the business on the cheap and its bid failed to reflect the potential upside from existing and experimental medicines.
"When I put it all into a spreadsheet, with reasonable sales numbers, I have never been able to get this to be worth less than $20 a share," he told Reuters.
GSK's $13 a share offer represents an 81 percent premium but it is still well below the $30 touched a year ago.
Human Genome - a pioneer of gene-based drug discovery, which sells the new lupus drug Benlysta GSK - has rejected GSK's offer as failing to reflect the value inherent in the company.
Investors, meanwhile, are hoping for more and the shares closed on Friday at $14.57.
(Reporting by Ben Hirschler; Editing by Sophie Walker)