GSK to acquire Human Genome Sciences for US$14.25 per Share in Cash
News Jul 16, 2012
GlaxoSmithKline plc and Human Genome Sciences announced that the companies have entered into a definitive agreement under which GSK will acquire HGS for US$14.25 per share in cash. The transaction values HGS at approximately US$3.6 billion on an equity basis, or approximately US$3 billion net of cash and debt, and represents a premium of 99% to the HGS closing price of US$7.17 per share on 18 April 2012, the last day of trading before HGS publicly disclosed GSK’s initial private offer. The Boards of Directors of both companies have approved the transaction.
The transaction is well aligned with GSK’s long-term strategy of delivering sustainable growth, simplifying GSK’s business model, enhancing R&D returns and deploying capital with discipline. Through complete ownership of BENLYSTA, albiglutide and darapladib, GSK can simplify and optimize R&D, commercial and manufacturing operations to advance these products most effectively and efficiently while securing the full potential long-term value of the assets. GSK expects to achieve at least US$200 million in cost synergies to be fully realized by 2015, subject to appropriate consultation, and expects the transaction to be accretive to core earnings beginning in 2013. GSK also assessed the potential returns of this acquisition relative to its long-term share buyback program. As part of this ongoing program, GSK continues to expect to repurchase £2-2.5 billion in shares in 2012.
Sir Andrew Witty, Chief Executive Officer of GSK, said: “We are pleased to have reached a mutually beneficial agreement with HGS on friendly terms and believe the combination of GSK and HGS represents clear financial and strategic logic for both companies and our respective shareholders. The transaction meets GSK’s strict financial criteria for acquisitions, and we expect will deliver significant returns over the long-term. This is a natural next step in our nearly 20-year relationship with HGS, and we look forward to working with HGS to integrate our businesses and to realizing the full value of BENLYSTA, albiglutide, and darapladib for the benefit of patients and our shareholders.”
H. Thomas Watkins, President and Chief Executive Officer, HGS, said: "After a thorough analysis of strategic alternatives, HGS has determined that a combination with GSK is the best course of action for our company and the best way to maximize value for our stockholders. HGS has had a long and productive working relationship with GSK, and together we will be uniquely positioned to achieve the full potential of BENLYSTA and other products in our pipeline for the benefit of those battling serious disease around the world. I would like to thank the dedicated employees of HGS, who have worked tirelessly to achieve breakthrough results and are the foundation of our success. We look forward to working with GSK to ensure a seamless transition for all of our stakeholders.”
GSK has amended its pending tender offer to increase the price to US$14.25 per share and to extend the expiration of the offer to 12:00 midnight, New York City time, on 27 July 2012. As of the close of business on 13 July, approximately 427,042 shares had been tendered and not withdrawn, pursuant to the offer. The offer is subject to customary conditions as set forth in the Merger Agreement being filed today by the parties with the SEC.
Lazard and Morgan Stanley are acting as financial advisors to GSK, and Cleary Gottlieb Steen & Hamilton and Wachtell, Lipton, Rosen & Katz are providing legal advice to the company. Goldman, Sachs & Co. and Credit Suisse Securities (USA) LLC are serving as financial advisors to HGS, and Skadden, Arps, Slate, Meagher & Flom LLP and DLA Piper LLP (US) are serving as legal counsel.
Forensic Evidence Shows Newfoundland was Populated Multiple Times by Distinct GroupsNews
Analysis of tiny amounts of bone or teeth from ancient remains showed that groups of indigenous people from Newfoundland had distinct population histories.READ MORE
Multi-tissue, Multi-individual Data Used to Identify Mechanisms of Gene RegulationNews
Developing a mechanistic model for how healthy bodies function and how certain diseases merge may now be possible.READ MORE
Biomarker for Glioblastoma Predicts Clinical Course and Sensitivity to TreatmentNews
Scientists validate a biomarker indicative of patients with Glioblastoma prognosis and likely response to specific therapies.READ MORE