By issuing a tender offer this week, GSK aims to bypass the company’s board of directors, which balked at a previous acquisition offer, and instead take control of HGS by purchasing a majority of its outstanding shares.
“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 said in a news release.
HGS released a statement on Wednesday asking its shareholders to hold off on a decision until the company has had time to review the hostile bid. Executives said they could take up to 10 business days from the time the tender offer is formally issued to respond.
In the meantime, the company said it will continue to evaluate its strategic alternatives.
GSK submitted an unsolicited bid for the company worth $2.59 billion on April 19. At that time, $13 per share marked an 81 percent premium over the stock’s closing price the previous day. Shares of the company have since been trading higher and closed at $14.62 Tuesday.
That offer was rejected, however, as HGS executives said the proposal undervalued the company’s long-term financial prospects, including the money it stands to make from sales of its flagship drug, Benlysta, which is designed to treat systemic lupus.
HGS and GSK have partnered on the development of several drugs, including Benlysta, in recent years and industry observers have long speculated that a merger is likely.
“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,” the statement said.