Exclusive: GSK eyes replacing Human Genome board
By Soyoung Kim and Ben Hirschler
NEW YORK/LONDON (Reuters) - GlaxoSmithKline Plc plans to launch a campaign to replace the entire board of Human Genome Sciences Inc with its own nominees, stepping up its $2.6 billion hostile bid for the U.S. biotech company, sources familiar with the situation said on Wednesday.
The British company has started reaching out to executives in the pharmaceutical industry as well as finance and governance experts who could be nominated as independent directors on Human Genome's 12-member board, they said.
GSK now intends to seek consent from Human Genome shareholders to replace the entire board and the consent solicitation process could come in the next few weeks, the sources said. GSK is also expected to extend its tender offer for Human Genome beyond June 7, added the sources, who asked not to be named because the matter is not public.
The move, which GSK had flagged as a possibility in a regulatory filing earlier this month, could send yet another signal to potential bidders of the seriousness of GSK's desire to buy Human Genome. This might make it harder for the U.S. biotech company to find a white knight willing to take on the UK pharma giant.
Healthcare bankers say GSK has an advantage over rivals to buy Human Genome because the two have existing partnerships around key drugs. The two companies together sell Benlysta, a new drug for the autoimmune condition known as lupus. They also collaborate on two other experimental drugs for diabetes and heart disease, currently in late-stage trials, that could become significant sellers. GSK owns the vast majority of the potential commercial gains associated with these drugs.
Human Genome has rejected the bid as inadequate and launched an auction process, inviting GSK to participate. The biotech company has also adopted a shareholder rights plan in a bid to thwart the hostile takeover attempt.
"GSK declined to enter the process and, through its offer, seeks to circumvent, disrupt and prematurely end the company's process to the disadvantage of (Human Genome) stockholders," a Human Genome spokesman said.
GSK declined to comment. Continued...