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| Human Genome Sciences rejects $2.6bn bid from GlaxoSmithKline | Human Genome Sciences rejects $2.6bn bid from GlaxoSmithKline |
| (40 minutes later) | |
| GlaxoSmithKline has swooped on its long-term partner Human Genome Sciences with a $2.6bn (£1.6bn) hostile offer, which was immediately rejected. | GlaxoSmithKline has swooped on its long-term partner Human Genome Sciences with a $2.6bn (£1.6bn) hostile offer, which was immediately rejected. |
| Human Genome said the bid, worth $13 a share, did not reflect the inherent value of the company, and has hired Goldman Sachs and Credit Suisse to spearhead its defence. They have been tasked with exploring strategic alternatives including a sale of the company. GSK has been invited to participate in the process. | Human Genome said the bid, worth $13 a share, did not reflect the inherent value of the company, and has hired Goldman Sachs and Credit Suisse to spearhead its defence. They have been tasked with exploring strategic alternatives including a sale of the company. GSK has been invited to participate in the process. |
| Shares in Human Genome closed at $7.17 on Wednesday, which means GSK's offer represents an 81% premium. In a sign that investors believe the company will be sold for more, the shares more than doubled to $15.01 in pre-market trading on Nasdaq. | Shares in Human Genome closed at $7.17 on Wednesday, which means GSK's offer represents an 81% premium. In a sign that investors believe the company will be sold for more, the shares more than doubled to $15.01 in pre-market trading on Nasdaq. |
| GSK expects to achieve at least $200m in cost savings by 2015 and to boost earnings from next year. The two companies collaborate on a number of medicines including Benlysta, the first new treatment for lupus in half a century. | GSK expects to achieve at least $200m in cost savings by 2015 and to boost earnings from next year. The two companies collaborate on a number of medicines including Benlysta, the first new treatment for lupus in half a century. |
| GSK's chief executive, Sir Andrew Witty, said he was disappointed that Human Genome had rejected his offer without discussion. "Having worked together with Human Genome Sciences for nearly 20 years, we believe there is clear strategic and financial logic to this combination for both companies and our respective shareholders – and that now is the appropriate time in the evolution of our relationship for our two companies to combine." | |
| He stressed that the deal met GSK's strict financial criteria for acquisitions, and sought to reassure his investors by saying that the company would buy back up to £2bn of shares this year, as part of its long-term share buyback programme. | He stressed that the deal met GSK's strict financial criteria for acquisitions, and sought to reassure his investors by saying that the company would buy back up to £2bn of shares this year, as part of its long-term share buyback programme. |
| Human Genome has asked for more information from GSK about progress with the experimental drugs the two companies have worked on together, including a heart drug called darapladib – which is in late-stage development and could become a blockbuster medicine – and the diabetes treatment albiglutide. |