GSK extends its $2.6 billion offer for Human Genome

GlaxoSmithKline <GSK.L> has extended its $2.6 billion offer to buy long-time partner Human Genome Sciences <HGSI.O> until the end of June as it battles the U.S. biotech company’s reluctant management.

The price remains unchanged at $13 a share under the longer tender, which will now expire at 5 p.m. New York time on June 29, Britain’s biggest drugmaker said on Friday. The initial tender period ran out on June 7.

People familiar with the situation had previously told Reuters that GSK was set to extend its tender offer - a direct appeal to Human Genome shareholders over the heads of management - as it begins a process to replace the entire HGS board with its own nominees.

The British company has already started reaching out to executives in the drug industry as well as finance and governance experts who could be nominated as independent directors of the 12-member board.

Sources said on May 30 that GSK intended to seek approval from Human Genome shareholders to replace the board under a “consent solicitation” process, which could come in the next few weeks. No details on the process were given on Friday.

Human Genome has rejected GSK’s bid as inadequate and has launched an auction process, inviting GSK to participate. At the same time it has adopted a “poison pill” shareholder rights plan in a bid to thwart the hostile takeover attempt.

The U.S. firm says it has had contacts with other firms, but no counterbidder to GSK has emerged and bankers say GSK has an advantage over rivals because of its partnerships with HGS around key drugs.

The two companies together sell Benlysta, a new drug for the autoimmune condition lupus, and they also collaborate on two other experimental drugs for diabetes and heart disease that could become significant sellers. GSK and Human Genome share rights to Benlysta, while GSK owns the majority of the commercial upside to the others.

Buying Human Genome would give GSK full rights to these partnered drugs, underscoring the appetite among big drugmakers for biotech products to refill their medicine chests.