GlaxoSmithKline gets Human Genome Sciences for $3 billion

GlaxoSmithKline said Monday it has a deal to buy Human Genome Sciences for about $3 billion, which is $400 million more than the London-based drugmaker offered in April.

GSK has operations in Center City and the Philadelphia suburbs.

In April, GSK offered $2.6 billion, or $13 per share, for HGS, which is based in Rockville, Md.

GSK said in a statement Monday that it would pay $14.25 per share and that both company boards had approved the deal.

The HGS management and board rejected the earlier offer, saying the company was worth much more.

The original conversation started friendly, but after the HGS rejection, shifted to hostile, with GSK going to HGS shareholders with the offer.

HGS said it was entertaining other offers, but there was skepticism in the market because three of HGS's top products are tied up in partnerships with GSK.

One of the three drugs, Benlysta, is the first new treatment for lupus in 50 years and was approved by the FDA.

Those partnerships meant another buyer would only get the HGS share of the partnership, which lessens the appeal.

GSK says the transaction values HGS at approximately $3.6 billion on an equity basis, or approximately $3 billion net of cash and debt.

The $14.25 price represents a premium of 99% to the HGS closing price of $7.17 per share on April 18, which was the last day of trading before HGS publicly announced that GSK had made a private offer.