Human Genome stock up on deal talk; Venture OKs buyout bid; Syniverse likely off deal market

By Cristal Cody

Tupelo, Miss., Aug. 25 - Shares of Human Genome Sciences, Inc. jumped nearly 12.00% Tuesday on speculation that the company may be acquired by GlaxoSmithKline plc.

An analyst told Prospect News a deal would make sense because the companies already have several drug partnerships.

Also on Tuesday, Venture Production plc stopped fighting a $2 billion takeover offer from Centrica Resources Ltd., Britain's largest gas retailer.

In other situations, Syniverse Holdings Inc. likely will be off the deal market for some time as it digests a $175 million cash acquisition of VeriSign, Inc.'s messaging business, an analyst told Prospect News on Tuesday.

Meanwhile, stocks traded up slightly on Tuesday.

The Dow Jones Industrial Average rose 30.01 points, or 0.32%, to 9,539.29.

The Standard & Poor's 500 index gained 2.43 points, or 0.24%, to close at 1,028.00, while the Nasdaq Composite index added 6.25 points, or 0.31%, to end at 2,024.23.

Deal talk resumes on Human Genome

Human Genome's stock closed up $2.03, or 11.79%, at $19.21 on Tuesday.

The Rockville, Md.-based company's stock has traded from 45 cents to $19.98 over the past year.

Market analysts on Tuesday cited a trade report that estimates Brentford, England-based GlaxoSmithKline could offer a buyout price of $30.00 a share for Human Genome.

Human Genome has a variety of drugs in development to treat diseases, including the drug Benlysta to treat lupus. Human Genome released late-stage clinical data in July for Benlysta that showed promising patient data, and the company expects to present additional details in November.

Liisa Bayko, an analyst with JMP Securities LLC, said Tuesday in an interview that the takeover rumors are the likely cause for the stock's price spike.

"GlaxoKline has a number of partnerships with the company, but it's just rumors at this point," she said.

Human Genome representatives did not return a message for comment.

GlaxoSmithKline's U.S.-listed shares lost 29 cents, or 0.74%, to close at $39.15 on Tuesday.

Venture concedes to Centrica

Although Venture Production recommended on Tuesday that shareholders accept Centrica's offer, the company said the bid of 845p per share still undervalues the Aberdeen, Scotland-based oil and gas company.

But at this point, the position is somewhat moot because the bid became a mandatory cash offer on Friday after Slough, England-based Centrica gained control of 58.70% of Venture's outstanding shares.

Centrica said it plans to apply to have the stock delisted if it gains 75.00% or more of Venture's shares. The company made the buyout offer on July 16.

"The board of Venture continues to believe that Centrica's final offer substantially undervalues Venture. However, the board recognizes that, in the event that the offer is declared wholly unconditional, Centrica will have control of Venture," Venture said in a statement on Tuesday. "Consequently, there is a risk that Venture shareholders who do not accept the offer could, as a result, own a minority interest in an unlisted company."

Centrica said in a statement on Tuesday that it expects settlement of the deal on Thursday.

"I know that the acquisition process will have created uncertainty for Venture staff but I can reassure them that we intend to develop and grow the business, and their skills and experience will be vital to a successful future," Centrica chief executive officer Sam Laidlaw said in the statement.

"The deal sees us continuing our investment in the North Sea, which is good news for our customers and shareholders," he said. "It further reduces our overall exposure to volatile movements in wholesale gas prices and helps secure U.K. energy supplies."

Venture shares traded up 0.12% at 844.50p.

Centrica's stock rose 0.51% to 236.00p on Tuesday.

Syniverse off deal market

Syniverse said Tuesday it agreed to acquire VeriSign's messaging business to expand its mobile messaging services.

Mountain View, Calif.-based VeriSign, a network infrastructure services company, has sold several non-core assets to focus on its main business.

Tony Holcombe, president and chief executive officer of Syniverse, said in a statement that the acquisition will help the company "grow our top line revenue through new offerings that serve operators' and enterprise customers' growing need for messaging services, but will also achieve the solutions scale and reach that is needed to compete globally in an expanding messaging market."

Syniverse, a Tampa, Fla.-based wireless voice and data services provider, is expected to take some time to integrate the new business.

"Syniverse historically buys complementary technology," Katherine Egbert, an analyst with Jefferies & Co., told Prospect News on Tuesday. "This is a big one. It will probably take them off the negotiating table for a while. But a year or two years from now, I expect them to look around."

Syniverse shares gained $3.47, or 22.61%, to close Tuesday at $18.82.

VeriSign's stock fell 18 cents, or 0.87%, to $20.56.

Mentioned in this article:

Centrica Resources Ltd. London: CNA

GlaxoSmithKline plc NYSE: GSK

Human Genome Sciences, Inc. Nasdaq: HGSI

Syniverse Holdings Inc. NYSE: SVR

Venture Production plc London: VPC

VeriSign, Inc. Nasdaq: VRSN

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