GSK to Sell $1 Billion Haleon Stake After Consumer Spinoff

GSK Plc plans to sell as much as £823 million ($1 billion) worth of shares in Haleon Plc, the consumer health-care division it spun off as a separate company last year.

(Bloomberg) — GSK Plc plans to sell as much as £823 million ($1 billion) worth of shares in Haleon Plc, the consumer health-care division it spun off as a separate company last year. 

The UK pharma group will sell as many as 240 million shares, equivalent to 2.5% of Haleon’s total, through a placing to institutional investors. GSK’s current stake is just under 13%.

The move comes just a few days after Pfizer Inc., which holds about 32% of Haleon, said it is also preparing to sell down its stake in the coming months. The US drug company said the stake in the British company was no longer a strategic asset for it.

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Haleon was originally formed from a combination of GSK’s and Pfizer’s consumer health units and sells a range of brands including Sensodyne toothpaste, Tums digestive aids and Voltaren gel for muscle pain. 

GSK decided to separate Haleon so it could better focus on its pharma and vaccines business. Headed by Chief Executive Officer Emma Walmsley, GSK has for the last few years faced questions about the strength of its drug pipeline, although it has had recent success with a vaccine against RSV, a common virus that can be deadly. 

Read more: First Vaccine Caps 60-Year Search to Stem Pervasive Virus (2)

Since the spinoff, GSK has said that it intended to treat its stake in Haleon like a financial investment. It has also said proceeds raised from any share sales will be used to strengthen its balance sheet, bolster its UK pension program and help support its aim to improve its drug pipeline. 

An accelerated bookbuild of this nature typically includes a discount on the share price. 

Haleon’s American depositary receipts fell as much as 5.5%. GSK’s ADRs were down 1.2%. 

Pfizer indicated when Haleon was spun out of GSK that it intended to exit eventually as part of its move to focus on pharma innovations. 

Haleon reported a nearly 35% jump in operating profit in a first-quarter update this month, after achieving growth in nearly all of its categories, even as it increased prices by 7.1% across a range of brands. 

Consumer goods companies have largely managed to pass on higher costs to consumers without sacrificing too much market share or profitability.

 

(Updates with GSK’s Haleon stake, other details)

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