LONDON (Reuters) - GlaxoSmithKline GSK.L has extended its $2.6 billion offer to buy long-time partner Human Genome Sciences HGSI.O until the end of June as it battles the U.S. biotech company’s reluctant management.
The price remains unchanged at $13 a share under the longer tender, which will now expire at 5 p.m. EDT (2100 GMT) New York time on June 29, Britain’s biggest drugmaker said on Friday.
The initial tender period ran out at midnight on June 7, by when GSK had secured less than 1 percent of Human Genome shares, which are trading at a premium to its offer.
People familiar with the situation had previously told Reuters that GSK was set to extend its tender offer - a direct appeal to Human Genome shareholders over the heads of management - as it begins a process to replace the entire Human Genome board with its own nominees.
The British company has already started reaching out to executives in the drug industry as well as finance and governance experts who could be nominated as independent directors of the 12-member board.
Sources said on May 30 that GSK intended to seek approval from Human Genome shareholders to replace the board under a “consent solicitation” process, which could come in the next few weeks. No details on the process were given on Friday.
Human Genome once again rejected GSK’s bid as inadequate. It has launched an auction process, inviting GSK to participate, while at the same time adopting a “poison pill” shareholder rights plan in a bid to thwart the hostile takeover attempt.
The U.S. firm has had contacts with other companies and said on Friday that the process “continues to be active and fully underway”. But no counterbidder to GSK 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.
Buying Human Genome would give GSK full rights to these partnered drugs, underscoring the appetite among big drugmakers for biotech products to refill their medicine chests.
But GSK may have more work to do in persuading investors that its $13-per-share bid is good enough and shares in Human Genome traded 2 percent higher at $13.50 by 1430 GMT.
That indicates investors still expect 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.
Editing by Kate Kelland and Hans-Juergen Peters