Human Genome Sciences Inc. (HGSI) rejected GlaxoSmithKline Plc (GSK)’s $13-a-share takeover offer partly because most of its biggest investors bought the stock at a higher average price, said two people with knowledge of the matter.
Of the 25 largest shareholders, about 22 of them acquired stakes with an average basis price that’s higher than the offer, said the people, who asked not to be identified because the discussions are private. Starting in late 2009, Human Genome shares traded between $20 and $30 until about August of 2011.
Glaxo first learned of Human Genome’s rejection of the $2.59 billion offer through a phone call earlier today, another person familiar with the situation said. Human Genome Chief Executive Officer Thomas Watkins called Glaxo CEO Andrew Witty at about 5 a.m. New York time, saying that the offer didn’t reflect Human Genome’s value and that the company would be making a public statement shortly, the person said. The statement was released at 5:12 a.m.
Human Genome first learned of Glaxo’s interest in an April 11 letter, two people said. The Rockville, Maryland-based company told Glaxo it was willing to discuss a sale at a higher price, said two people. Late last week, Human Genome decided to go public with the offer and put itself up for sale, anticipating interest from larger pharmaceutical companies, the people said.
A spokeswoman for London-based Glaxo and a spokesman for Human Genome declined to comment beyond the company’s statement.
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