GlaxoSmithKline, the British pharmaceutical giant, said it is "disappointed" to have its $2.6bn (£1.6bn) takeover bid for Human Genome Sciences Inc, a US-based biopharmaceutical company, rejected, asserting that it "reflects full and fair value".
The unsolicited $13 a share bid from GSK, the world's third largest pharmaceutical company, is 81 percent higher than HGS's $7.17 close price on 18 April. It has shoved HGS stock in pre-market trading up to $14.40.
"Having worked together with Human Genome Sciences for nearly 20 years, we believe there is clear strategic and financial logic to this combination for both companies and our respective shareholders - and that now is the appropriate time in the evolution of our relationship for our two companies to combine," Sir Andrew Witty, chief executive of GSK, said.
"This offer reflects full and fair value for HGS and the synergies inherent in this combination. It also eliminates substantial execution risk for HGS shareholders and delivers immediate and certain value that is superior to what we believe HGS can reasonably expect to create as a standalone company.
Witty added: "We are disappointed that HGS has rejected our offer without discussion and are confident that our offer is in the best interest of shareholders of both companies."
Lazard and Morgan Stanley are acting as financial advisors to GSK.
"The HGS Board of Directors, in consultation with independent financial and legal advisors, has carefully reviewed and considered the GSK offer and has determined that the offer does not reflect the value inherent in HGS," said an HGS statement.
"HGS also announced today that its Board of Directors has authorized the exploration of strategic alternatives in the best interests of shareholders, including, but not limited to, a potential sale of the company."
Goldman Sachs and Credit Suisse have both been appointed to help HGS analyse its alternatives to a GSK bid.
"GSK has been invited to participate in this process and HGS has requested additional information regarding investigational products in GSK's clinical pipeline to which HGS has substantial financial rights," HGS said.
"There can be no assurance that any transaction will occur or if so on what terms.
"HGS does not intend to discuss the status of its evaluation unless and until a specific transaction has been approved."
The two companies already work together on drugs development, including darapladib for cardiovascular disease and albiglutide, for the treatment of type 2 diabetes.