GlaxoSmithKline raises India unit stake to 75% via open offer; shares at 3-month low

Written by fe Bureau | Mumbai | Updated: Mar 11 2014, 00:58am hrs
GlaxoSmithKline PharmaGlaxoSmithKline Pharma is already majority owned and controlled by the GSK Group. (AP)
Shares of Glaxosmithkline Pharmaceuticals Ltd shares were trading 5% lower at 3-month low at Rs 2518.05 on Monday after the parent GSK Plc in an announcement on the London Stock Exchange on Sunday said it raised its stake in the Indian subsidiary to 75% from 50.7% following the closure of the voluntary open offer on March 5.

Experts feel minority shareholders' interests would be hurt with MNCs raising stake in their respective subsidiaries. "An MNC wants as much of extra value creation from its Indian investments to flow back to the global parent and not to the minority shareholder," Ambit Capital said in a report last week.

GlaxoSmithKline Pte, the Singapore arm of the London-based pharma giant, accepted 2,06,09,774 shares (24.33%) for a consideration of Rs 6,389 core. The open offer, which was made by GlaxoSmithKline Pte along with GSK Plc and Glaxo Group, was priced at Rs 3,100/share.

We are very pleased with the outcome of this transaction, which further increases our exposure to a strategically important market, David Redfern, chief strategy officer, GSK Plc said.