GlaxoSmithKline India stake @$940 mn

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GlaxoSmithKline Consumer Healthcare shares surge following news that its UK-based parent group plans to raise its stake in the unit. GlaxoSmithKline Consumer Healthcare shares surge following news that its UK-based parent group plans to raise its stake in the unit.
SummaryGSK plans to raise stake in Indian arm by up to 31.8 per cent for for Rs 5,220 cr.

Highlights:

* GlaxoSmithKline plans to raise stake in Indian arm by up to 31.8 pct

* Open offer at 3,900 rupees per share

* GSK Consumer Healthcare shares hit record high

GlaxoSmithKline Plc plans to buy up to an additional 31.8 percent stake in its Indian consumer products arm for about $940 million, as Britain's biggest drugmaker deepens its emerging markets and non-prescription consumer health footprint.

GlaxoSmithKline plans to raise its stake in GlaxoSmithKline Consumer Healthcare Ltd to 75 percent from 43.2 percent, paying 3,900 rupees ($70.16) per share through an open offer, it said in a statement.

The price represents a premium of 28 percent to the stock's Friday close.

The news sent shares of GSK Consumer Healthcare to a record high. The shares were locked at 3,659.20 rupees, up 20 percent, their maximum daily trading limit, while the Mumbai market was up 0.23 percent, by 0600 GMT.

This transaction represents a further step in GSK's strategy to invest in the world's fastest growing markets, David Redfern, chief strategy officer at GlaxoSmithKline, said in the statement.

The company, however, has no current plans to launch an open offer for its Indian drugs unit GlaxoSmithKline Pharmaceuticals Ltd, he added.

HORLICKS PLAN

Tough market conditions in Europe have hampered GSK's hopes for a return to sales growth this year, although the company's growing business in emerging markets and its large consumer healthcare operation are both doing well.

In India, for example, sales of the consumer unit's flagship Horlicks brand stood at 270 million pounds ($432 million) in the year that ended December 2011, contributing to nearly three-quarters of its total revenues.

A lot of the current business of Horlicks is in the south and the east of India. So there is still a great opportunity to increase the penetration to the north and the west, Redfern said in an interview, adding that the company intended to introduce new variants of the brand in the country.

GlaxoSmithKline does not plan to delist the unit.

Securities regulations in India require a minimum public shareholding of 25 percent for a company to maintain a public listing.

The offer period is expected to begin in January 2013.

($1 = 55.5850 Indian rupees) ($1 = 0.6246 British pounds)

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GSK makes open offer for 31.8% stake in GSKCH for Rs 5,220 cr

New Delhi: (PTI) UK-based Healthcare and drug major GlaxoSmithKline today said it has offered to hike stake in its Indian subsidiary, GlaxoSmithKline Consumer Healthcare, to up to 75 per cent which would entail an outgo of over Rs 5,220 crore.

"GlaxoSmithKline (GSK) has announced a voluntary open offer to increase its stake in its publicly-listed consumer healthcare subsidiary in India (GlaxoSmithKline Consumer Healthcare), from 43.2 per cent to up to 75 per cent at a price of Rs 3,900 per share," the company said in a statement.

The offer made pursuant to the rules of the Securities and Exchange Board of India, is to acquire up to 13,389,410 shares, representing 31.8 per cent of the total outstanding shares of the Indian company, it added.

The potential total value of the transaction at the offer price is approximately Rs 5,220 crore or 591 million pounds, the company said.

The offer represents a premium of about 28 per cent to GlaxoSmithKline Consumer Healthcare's closing share price on the National Stock Exchange on November 23, 2012, GlaxoSmithKline said.

Commenting on the development, GSK Chief Strategy Officer David Redfern said: "This transaction represents a further step in GSK's strategy to invest in the world's fastest growing markets and, we believe, it offers a liquidity opportunity at an attractive premium for existing shareholders".

The transaction, which will be funded through GSK's existing cash resources, will be earnings neutral for the first year and accretive thereafter and will not impact expectations for the group's long-term share buyback programme, GSK said.

Subject to regulatory clearance, the offer period is expected to begin in January 2013. Payment for the shares will take place shortly after close of the offer, it added.

As on quarter ended September 2012, the foreign promoter of GSKCH held 43.2 per cent stake in the company while the public shareholding is at 56.84 per cent.

Securities regulations in India require a minimum public shareholding of 25 per cent for a company to maintain a public listing in the country.

GSK's Consumer Healthcare business in India generated over Rs 2,800 crore turnover in the financial year ended 31 December, 2011. The company employs nearly 3,200 people.

GSK shares surge 20 pc as UK-based parent makes open offer

(PTI) Shares of GlaxoSmithKline Consumer Healthcare today skyrocketed by 20 per cent to touch the upper circuit limit after its UK-based parent GlaxoSmithKline announced an open offer to hike stake in the subsidiary.

Shares of GlaxoSmithKline Consumer Healthcare zoomed up by 20 per cent to touch the upper circuit limit of Rs 3,651.80 on the BSE.

Similar movement was seen at the NSE, where the stock surged 20 per cent to Rs 3,659.20.

GlaxoSmithKline today said it has offered to hike stake in its Indian subsidiary, GlaxoSmithKline Consumer Healthcare, to up to 75 per cent which would entail an outgo of over Rs 5,220 crore.

"GlaxoSmithKline (GSK) has announced a voluntary open offer to increase its stake in its publicly-listed consumer healthcare subsidiary in India (GlaxoSmithKline Consumer Healthcare), from 43.2 per cent to up to 75 per cent at a price of Rs 3,900 per share," the company said in a statement.

The potential total value of the transaction at the offer price is approximately Rs 5,220 crore or 591 million pounds, the company said.

The offer represents a premium of about 28 per cent to GlaxoSmithKline Consumer Healthcare's closing share price on the National Stock Exchange on November 23, 2012, GSK said.

As on quarter ended September 2012, the foreign promoter of GSKCH held 43.2 per cent stake in the company while the public shareholding is at 56.84 per cent.

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