LONDON (dpa-AFX) - Human Genome Sciences, Inc. (HGSI) said its Board of Directors, after careful review and consideration with the assistance of the company's management and financial and legal advisors, has unanimously determined that the unsolicited tender offer from GlaxoSmithKline (GSK, GSK.L) to acquire all outstanding common shares of HGS for $13.00 per share in cash is inadequate, undervalues the company and is not in the best interests of HGS and its stockholders.
Accordingly, the Board recommends that stockholders reject GlaxoSmithKline's tender offer and not tender any of their shares to GSK. The basis for the Board's decision is set forth in the Schedule 14D-9 being filed by HGS today with the Securities and Exchange Commission.
The Board believes that the Offer is inadequate and undervalues Human Genome Sciences because it does not capture the inherent value in the company's assets, operations and growth opportunities, including the significant upside potential represented by BENLYSTA and the company's valuable pipeline.
Separately, the company said its Board of Directors has adopted a Stockholder Rights Plan and declared a dividend of one share purchase right for each share of HGS's common stock held of record at the close of business on May 29, 2012.
The company's Board is committed to maximizing shareholder value through its previously announced strategic review process. The Rights Plan, which has a term of one year, is intended to allow the company to fully engage in its strategic review process and as a means to protect the long-term interests of the company's stockholders. The Rights Plan will not prevent any offers or transactions that the Board determines to be in the best interest of HGS and its stockholders.
The Rights expire on May 29, 2013 unless earlier redeemed, exchanged or terminated by the company. The Rights distribution will not be taxable to stockholders and will be payable to stockholders of record on May 29, 2012.
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