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Wednesday, May 23, 2012

GlaxoSmithKline to drop Human Genome bid if "poison pill" stands

(Reuters) - GlaxoSmithKline (GSK.L) said it would not proceed with its $2.6 billion offer for Human Genome Sciences (HGSI.O) unless the U.S. biotechnology company dropped a "poison pill" shareholder rights plan imposed to block the deal.

Human Genome adopted the stockholder rights plan earlier this month in an attempt to ward off GSK in what is becoming an increasingly acrimonious battle between the companies that together sell new Lupus drug Benlysta.

The British company is taking its $13-a-share offer direct to investors after Human Genome's board said it was inadequate.

The plan allows shareholders to buy additional shares at a discount if one investor buys or launches a tender offer for more than 15 percent of the group's stock without the board's approval, effectively blocking an unwanted bidder. Read More