June 15, 2012 / 7:15 AM / 7 years ago

Human Genome sets July 16 deadline for bids

LONDON (Reuters) - U.S. biotech company Human Genome Sciences HGSI.O said on Friday it had set a bid date of July 16 for definitive offers to acquire the company and again urged hostile bidder GlaxoSmithKline (GSK.L) to join the auction process.

GSK, Human Genome’s long-time partner, has taken its $2.6 billion bid for the pioneer of gene-based medicine direct to shareholders through a tender offer, while Human Genome’s board has rejected the $13-a-share offer as inadequate.

Britain’s biggest drugmaker has previously rejected the idea of participating in the auction process being run by Human Genome and its advisers Goldman Sachs and Credit Suisse, since it believes its offer is full and fair.

Nonetheless, Human Genome said in a statement it had sent a letter to GSK on Thursday once again inviting it to join in.

“HGS is committed to completing its exploration of strategic alternatives in a manner that ensures that HGS stockholders have the benefit of a complete and fair process and welcomes GSK to fully participate in such process,” it said.

GSK last week extended its tender offer to June 29, after securing less than 1 percent of the biotech firm’s stock in an initial tender round.

People familiar with the situation said GSK had also started a process to replace the entire Human Genome board with its own nominees.

GSK intends to seek approval from Human Genome shareholders to replace the 12-member board under a “consent solicitation” process, which it can launch while its tender is open. GSK also has the option to extend the tender again beyond June 29.

Human Genome, which has also adopted a “poison pill” shareholder rights plan in a bid to thwart the hostile takeover attempt, says it has had contacts with other companies. But no counterbidder has emerged and bankers say GSK has an advantage over rivals because of its partnerships around key drugs.

The two companies together sell Benlysta, a new drug for the autoimmune condition lupus, and they also collaborate on two other experimental drugs for diabetes and heart disease that could become significant sellers. GSK and Human Genome share rights to Benlysta, while GSK owns the majority of the commercial upside to the other products.

Human Genome shares continue to trade just above GSK’s $13-a-share offer, ending on Thursday at $13.10. That indicates investors still hope for a higher price, although the stock has fallen back from a high of more than $15 hit in April, soon after the unsolicited offer was made public.

Reporting by Ben Hirschler; Editing by Hans-Juergen Peters

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