British pharmaceutical giant GlaxoSmithKline Plc (GSK) has successfully garnered £886 million ($1.1 billion) from its latest share sale in Haleon Plc, the consumer-health entity it spun off just last year. The transaction involved the sale of 270 million shares at a price of 328 pence, offering a slight discount of approximately 2.5% below Haleon’s closing price on Thursday.
This share sale has resulted in GlaxoSmithKline retaining a 7.4% stake in Haleon, the distinguished manufacturer behind household names such as Aquafresh toothpaste and Panadol. Haleon, a conglomerate initially formed from the consumer health units of GSK and Pfizer Inc., saw its separation from GSK to enable the company to channel its focus towards its pharmaceutical and vaccines divisions. This strategic move was prompted by pressure from activist investor Elliott Investment Management and aims to fortify the prospects of both GSK and Haleon.
Since the spinoff, GSK has indicated its intention to treat its stake in Haleon as a financial investment, with the proceeds earmarked to bolster its financial position and underpin its drive to enhance its drug development pipeline. Notably, this stake sale follows closely on the heels of GSK’s divestment of approximately £804 million ($978 million) worth of Haleon stock just six months ago. Pfizer, too, has signaled its intent to gradually reduce its stake in Haleon as part of its strategic shift towards pharmaceutical innovations.
Leading financial institutions, Bank of America Corp and Citigroup Inc., have taken up the mantle of global coordinators for this offering. Sources reveal that demand for the offering surpassed its size within minutes of being presented on the market.
The market’s attention has been drawn to speculation regarding the potential impact of the share placement on GSK’s stock price. Analysts posit that for a comprehensive assessment of investor interest in Haleon’s stock, Pfizer—holding roughly a third of the company—must also embark on its divestment.
In the face of uncertainties regarding the future dynamics between GSK and Haleon, the company remains resolute in its commitment to advancing drug pipeline innovation and supporting vital drug development endeavors. With the infusion of £886 million into GSK’s balance sheet, the outlook appears promising for the British pharmaceutical titan.
Source: Bloomberg
