(BN) Glaxo Raises Human Genome Bid to About $14 a Share, Reuters Says

GlaxoSmithKline Plc (GSK) raised its hostile takeover offer for Human Genome Sciences Inc. to about $14 a share, Reuters reported, citing two people familiar with the situation.

The proposed cash purchase is subject to approval of some last-minute details and may be announced before markets open in the U.S. today, Reuters reported on its website today. David Daley, a spokesman for Glaxo in London, wasn't immediately able to comment on the report. A voicemail message left with Human Genome's corporate communications office outside business hours wasn't immediately returned.

Glaxo's earlier $13-a-share offer for Human Genome, which valued the Rockville, Maryland-based biotechnology company at $2.6 billion, is set to expire at 5 p.m. New York time July 20.

Human Genome shares have traded above the offer price since Glaxo took its proposed takeover hostile on May 9, signaling that investors expected an increased bid. Glaxo went directly to Human Genome shareholders after the company rebuffed its approaches. Human Genome had set a deadline of today for competing bids.

Buying Human Genome would give Glaxo full control over marketing Benlysta, a treatment for lupus. The companies share revenue and profits from the drug equally.

Glaxo and Human Genome are also collaborating on two experimental medicines that are in late-stage testing: albiglutide for diabetes and darapladib for hardening of the arteries. Human Genome has the right to receive royalties of 10 percent on sales of darapladib and 5 percent on sales of albiglutide.

Human Genome rose 0.6 percent to $13.58 in New York trading on July 13, giving it a market value of $2.7 billion.

Poison Pill

Human Genome said on May 17 it was in talks with "major" pharmaceutical and biotechnology companies about a potential transaction and adopted a so-called "poison pill" shareholder rights plan to deter the hostile takeover.

Such defenses are engineered to make unwanted takeover bids prohibitively expensive by allowing existing shareholders to buy new shares at a discount when the bid is made. That drives up the cost of the acquisition.

Bankers from Goldman, Sachs & Co. and Credit Suisse Group AG (CSGN) are advising Human Genome, while Glaxo has hired Lazard Ltd. (LAZ) and Morgan Stanley. (MS)

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