HGS said no thanks and the friendliness has fallen by the wayside.
Now, Glaxo is working toward taking over the company and dismissing the HGS management and board of directors.
HGS complains that the offer is not lucrative enough, but Glaxo notes that it is an 81 percent premium over the share price of $7.17 on April 18, when the offer was made public.
HGS management and its board adopted a so-called poison pill provision to ward off Glaxo and talked about getting other bidders involved.
So far, none has emerged publicly.
The impediment for other bidders is that Glaxo already has partnerships with HGS on its most promising products, so another bidder would get only the HGS share of those products' potential profits while incurring part of the current costs.
"GSK continues to believe its offer represents full and fair value and is in the best interests of both companies' shareholders," Glaxo said in a statement Friday. "It is well-aligned to GSK's long-term strategy of delivering sustainable growth, simplifying GSK's business model, enhancing R&D returns, and deploying capital with discipline. For HGS shareholders, it provides immediate liquidity at a substantial premium while eliminating further exposure to the significant execution risk inherent in HGS achieving its future growth objectives. GSK's offer reflects the value of Benlysta, darapladib, albiglutide [drugs the companies have partnered on], HGS' operating and financial assets, and expected cost synergies of at least $200 million."
HGS said in its Friday statement that it rejected Glaxo's $13-a-share offer because it was "inadequate and does not reflect the value inherent in HGS." The company said its "exploration of strategic alternatives" remained "fully under way." The company's shares closed up 9 cents Friday at $13.32.
Contact David Sell at 215-854-4506, dsell@phillynews.com, or follow on Twitter @PhillyPharma. Read his " PhillyPharma" blog on philly.com.
