Human Genome investor Joan Litwin sued the company and executives arguing that the proposed transaction undervalues the company and that management, which had months earlier rejected a $2.6 billion offer from Glaxo, didn’t fulfill its duties. Litwin seeks to represent all Human Genome shareholders as a group, according to the complaint filed yesterday in federal court in Wilmington, Delaware.
Glaxo, the U.K.’s largest drug-maker, agreed to acquire Human Genome for $14.25 per share, according to a statement on July 16. London-based Glaxo, also named in the lawsuit, sought to acquire its Benlysta lupus treatment partner for months offering $13 a share in April. The deal accepted by Human Genome’s executives is valued at $3.6 billion including debt and cash.
“The tender offer is grossly inadequate,” lawyers for Litwin said in the complaint. The board urged investors to reject the $13 a share offer, saying “it does not capture HGS’ inherent value and growth opportunities” just two months before accepting a deal offering a premium of 9.7 percent more, according to court papers.
Jerry Parrott, a spokesman for Rockville, Maryland-based Human Genome, and Kevin Colgan, a U.S.-based spokesman for Glaxo, didn’t immediately respond to phone calls after regular business hours seeking comment on the lawsuit.
The case is Litwin v. Human Genome Sciences Inc., 12-00979, Delaware District Court (Wilmington).
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