(Reuters) - A Maryland judge denied a request to temporarily restrain Human Genome Sciences HGSI.O from taking measures to fend off GlaxoSmithKline’s (GSK.L) hostile $2.6 billion takeover bid, according to a court notification.
Duane Howell, a Human Genome shareholder, had filed a lawsuit against the U.S. biotechnology company’s board and requested that the court invalidate Human Genome’s “poison pill” stockholder rights plan designed to ward off GlaxoSmithKline.
Howell’s lawyers argued in the court papers that the poison pill holds the “company’s shareholders hostage to the board and prohibit GSK and other potential acquirers from taking offers to purchase the company.”
The term “poison pill” usually refers to a company’s move to ward off any unwanted or hostile takeover attempts.
After a hearing on Thursday, Montgomery County Circuit Court Judge Michael Mason denied Howell’s request, saying only one shareholder had sued the company, according to a report by Bloomberg News.
“This is not a case where a number of disgruntled shareholders have come to court up in arms,” the judge said in court, according to the report.
On May 30, Reuters reported that GlaxoSmithKline plans to launch a campaign to replace the entire board of Human Genome Sciences with its own nominees, stepping up its hostile bid for the U.S. biotech company.
The case is Duane Howell, individually and all others similarly situated vs H. Thomas Watkins, et al, Case No. 362531, Circuit Court for Montgomery County, Maryland.
Reporting by Sakthi Prasad in Bangalore; Editing by Ryan Woo