British drugmaker GlaxoSmithKline Plc (LON:GSK) is seen to increase to some USD14.00 (EUR11.43) a share, or around USD2.8bn in total, from USD13.00 per share, its bid to buy US biopharmaceutical firm Human Genome Sciences (NASDAQ:HGSI), or HGS, and could announce an agreement on Monday, according to Reuters sources.
The parties are currently negotiating the final details of a transaction, the informed people told the news agency.
The move comes as Human Genome investors have been pressing for talks with hostile bidder GSK after no alternative offers came in during an auction process carried out as part of the company’s strategic review, the report said.
The British group took its offer to HGS shareholders in May after the target’s board turned it down earlier in April. It set 20 July as the deadline for its bid allowing it to run beyond the 16 July deadline set by HGS for final offers to be submitted as part of its strategic review. GSK, which declined to participate in that process, said the extension to its bid would enable HGS shareholders to compare the results of the board’s review to the hostile offer.
The transaction offers immediate premium liquidity to HSG’ investors, while sparing them the inevitable high risk involved in HSG pursuing its future growth objectives, the buyer explained.
It is also in line with GSK’s long-term growth strategy and would help it simplify its business model.
GSK has repeatedly said it was willing to meet with HGS and review its takeover proposal at any time, but the talks during the weekend have been initiated by Human Genome, according to one of the sources cited by Reuters.
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