GSK sells £886 million stake in former consumer unit Haleon
GSK has raised £886 million (S$1.5 billion) from the latest sale of a tranche of shares in Haleon, the consumer-health business it spun off last year.
The British drug company sold 270 million shares at a price of 328 pence, according to a regulatory announcement on Friday (Oct 6). The price reflects a discount to Haleon’s closing price of 336.25 pence on Thursday.
Accelerated offerings are typically priced at a discount to entice shareholders to buy into the deal. Haleon shares have risen about 9 per cent since it started trading in July 2022.
The sale represents about a quarter of GSK’s remaining stake in Haleon, the maker of Aquafresh toothpaste and Panadol, leaving the group with a 7.4 per cent position.
Haleon was originally formed from a combination of GSK’s and Pfizer’s consumer health units.
GSK decided to separate Haleon so that it could better focus on its pharma and vaccines business. Headed by chief executive officer Emma Walmsley, GSK is trying to strengthen its drug pipeline. A recent success was a vaccine against RSV, a common virus that can be deadly.
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The spinoff was aimed at strengthening the prospects of both GSK and Haleon, following pressure from activist investor Elliott Investment Management.
Since the spinoff, GSK has said that it intended to treat its stake in Haleon like a financial investment, using proceeds raised to strengthen its balance sheet and help support its aim to improve its drug pipeline.
The stake sale comes less than six months after GSK offloaded about £804 million worth of Haleon stock. Pfizer has also indicated that it will sell down its stake in Haleon gradually as part of its move to focus on pharma innovations.
“Investors would likely prefer a bigger placement than this 2.9 per cent by GSK,” said Bruno Monteyne, an analyst at Bernstein, adding that there is still a large nearly-40 per cent overhang on Haleon stock.
“If a decent-sized placement of about 10 per cent was done (with Pfizer starting to sell) then investors can properly judge the appetite for this stock and start seeing an end to this tunnel.”
Bank of America and Citigroup are global coordinators on the offering. The banks gathered demand in excess of the offering size within minutes of putting the block on the market, according to terms seen by Bloomberg. BLOOMBERG
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