Human Genome Sciences Inc. investors betting on a sweetened bid from GlaxoSmithKline Plc (GSK) stand to reap a 13% return, even as their expectations of securing America's biggest price increase diminish.
Human Genome, which makes treatments for lupus and diabetes, has traded above Glaxo's $13-a-share bid every day since it was rejected in April, according to data compiled by Bloomberg. After less than 1% of investors tendered their shares before Glaxo extended the offer last week, the stock closed at $13.29 yesterday, signaling traders who profit from acquisitions still expect the U.K. drugmaker to boost the price.
While the spread has narrowed as no rival offers emerged so far during Human Genome's sale process, WallachBeth Capital LLC and Piper Jaffray Cos. said Glaxo (GSK), which collaborates with Human Genome on three drugs, may raise its bid to $15 a share to overcome the company's poison pill. That would be 13% higher than yesterday's close. Glaxo's $2.6 billion proposal was already 68% higher than Human Genome's 20-day average before it was disclosed, twice the average premium for drug and biotechnology takeovers since 2006, before the financial crisis. . .View Full Article