Human Genome Science Inc., being taken-over by lupus-drug partner GlaxoSmithKline Plc for about $3 billion, was sued by a shareholder claiming the offer shortchanges investors.
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).