GlaxoSmithKline said Wednesday morning it would play a bit more hardball with Human Genome Sciences as the British drugmaker tries to absorb the U.S. company by making tender offer for all outstanding shares.
GSK is based in London but has a big operation in Center City and facilities in suburban Philadelphia.
On April 18, Human Genome Sciences disclosed GSK's offer of $2.6 billion. But HGS management declined the offer by saying it undervalued the company and invited GSK to participate in a "strategic review process" to maximize the value for HGS shareholders.
However, GSK says its offer is plenty valuable - an 81 percent premium on the stock price of $7.17 on April 18 - and it will go directly to shareholders.
Part of GSK's confidence lies in its partnerships with HGS in several of HGS' key products. That might deter other bidders for HGS since they would be buying only a piece of those assets.
"GSK continues to believe that now is the appropriate time in the evolution of the GSK/HGS relationship for the companies to combine and that GSK is uniquely positioned to deliver on the promises of Benlysta, albiglutide and darapladib," GSK said in a statement. "GSK values the long relationship it has with HGS and has clearly stated its preference to complete a transaction on a friendly basis in a timely fashion. GSK remains willing to meet and review its offer with HGS at any time.
"GSK's decision not to participate in HGS's strategic alternatives review process and to take its offer directly to HGS shareholders reflects a number of factors, including:
GSK's participation in the process is unnecessary as its offer is not conditioned on due diligence or financing and can be completed expeditiously.
It is important for HGS shareholders to understand that GSK is committed to proceeding with its offer.
There is clear strategic and financial logic to this combination and HGS shareholders should have the opportunity to decide for themselves on the merits of the offer.
"GSK believes that the four weeks that have passed since its offer made on April 11th, together with the additional 20 business days that GSK's tender offer must remain open following its commencement, provides a reasonable amount of time for HGS to complete its review of alternatives."
There was no early response from HGS.