GlaxoSmithKline Plans to Change Entire HGS Board
GlaxoSmithKline (GSK) wants to change the whole board of Human Genome Sciences (HGS), according to a Reuters report, and contenders from across the sector have been approached.
The news agency, states that GSK will pursue the assistance from Human Genome Sciences shareholders to exchange the board with 12 independent directors. They claim that the UK drugs giant has contacted executives within the pharmaceutical industry, as well as finance and governance specialists.
The fight for control of Human Genome Sciences has been heating up over the last few weeks and HGS have been repeatedly rejecting the $2.60 billion, or $13 per share, offer by GSK as insufficient. HGS began a procedure to explore different strategic options, but GlaxoSmithKline refused to take part, and added a condition to their share agreement for the lupus drug Benlysta (belimumab), requiring Human Genome Sciences to abandon a ‘poison pill’ which was taken on to foil any hostile offer.
HGS’ corporate bylaws permit their shareholders to prompt a amendment of board control without calling a meeting, a feature GlaxoSmithKline indicated they may seek to take advantage of in a regulatory filing earlier this month.
When they have their team of suggested directors, GlaxoSmithKline would submit their plan to regulators and send consent solicitation letters to Human Genome Sciences’ shareholders, who would then have to choose whether or not to call for a change.
Ten institutional shareholders altogether own over 75% of Human Genome Sciences’ stock, and pressure from a big enough group of them could generate a deal. Some investors have already revealed their frustration with HGS this month by suing the organisation for adopting a poison pill.
GlaxoSmithKline did not comment on the report, although a HGS spokesperson was cited as commenting that the board still recommends that investors not to tender their shares. The spokesperson also claimed that GSK was seeking “to circumvent, disrupt and prematurely end the company’s [strategic review] process to the disadvantage of HGS stockholders.”