Human Genome Sciences Inc. investors lost a bid to extend GlaxoSmithKline Plc (GSK)’s deadline of tomorrow to decide whether to tender their shares for a $3 billion buyout.
U.S. District Judge Sue L. Robinson ruled today in Wilmington, Delaware, that the shareholders aren’t entitled to more time to consider the offer, saying they won’t be harmed and haven’t demonstrated a likelihood of success in their suit.
Glaxo and Human Genome “followed the tender offer rules ‘just like a cookbook,’” Robinson wrote in her nine-page decision.
The investors today also lost a parallel action in state court in Rockville, Maryland, where Human Genome is based, according to David Clarke, a lawyer who represents the company in that case.
“The judge found that the disclosures were adequate,” and rejected the shareholders’ request for more information and time, Clarke said in a phone interview.
The ruling couldn’t be immediately confirmed in court records.
Glaxo, the U.K.’s largest drugmaker, agreed to acquire Human Genome for $14.25 a share, according to a statement on July 16. London-based Glaxo 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 shareholders argued they needed more time “to digest” Glaxo’s new offer because of a $1.25-a-share increase in the offer on July 16, according to Robinson’s ruling.
An extension of the tender offer isn’t warranted because the only component of the deal that changed was the price, which requires 10 days’ advance notice before closing a tender offer, Robinson wrote.
Robinson also decided that “no shareholder is being required or pressured to render a final decision on the tender offer by the closing date.” The agreement has provisions that extend the offering period if a majority of the shares aren’t tendered by the closing date, she said in court papers. If a majority should be tendered, those that remain will be cashed out.
Blake A. Bennett, a lawyer representing the shareholders, said in a phone interview he couldn’t immediately comment on the ruling.
Attorneys Edward Welch and Edward Micheletti, who represented Human Genome and its directors in the Delaware case, declined to comment on the decision.
The cases are David v. Human Genome Sciences Inc. (HGSI:US), 12-CV- 965, U.S. District Court, District of Delaware (Wilmington); and Howell v. Watkins, 3625331, Circuit Court for Montgomery County, Maryland (Rockville).
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