MARKET REPORT: GSK achieves windfall of over £800m as it begins selling its stake in Sensodyne toothpaste maker Haleon
GSK got a windfall of more than £800 million when it began selling its stake in Sensodyne toothpaste maker Haleon.
The FTSE 100 pharma giant sold about 240 million shares in the consumer health group, equivalent to a 2.6 percent stake in the company. GSK sold the shares for 335 pence each, a 2.3 per cent discount to Haleon’s previous closing price, for a total of £804 million.
Haleon, which also makes Panadol painkillers and Centrum vitamins, spun off from GSK in July last year into the largest European stock exchange listing in more than a decade.
After an initial listing at 330p, the shares have since risen about 4.5 percent. GSK retained a 12.9 percent stake after the split and still controls 10.4 percent of the company after the recent share sale.
As the sale had been expected, Haleon shares moved little during the session, rising 0.04 percent, or 0.15 pence, to 343 pence.
Windfall: The pharmaceutical giant on the FTSE 100 unloaded about 240 million shares in the consumer health group
GSK’s move to sell part of its stake followed reports earlier this month that US rival Pfizer, which owns nearly 26 percent of Haleon, would do the same. David Denton, Pfizer’s chief financial officer, previously said the company would begin selling its stake in a “slow and methodical” manner. Following the sale of GSK, both companies have agreed not to sell any more stock for at least 60 days.
They both said they would sell their holdings in time, but the ease with which GSK placed 240 million shares in Haleon suggests there will be no problem selling the remaining 10.3 percent stake in the company. said investment firm AJ Bell. director Russ Mould.
GSK also benefited after a Canadian court rejected a proposed class action lawsuit related to its heartburn drug Zantac. The Supreme Court of British Columbia ruled that there was little evidence that the drug led to an increased risk of cancer. GSK shares rose 1.8 percent, or 25.4 pence, to 1470.2 pence.
The FTSE 100 rose 0.3 percent, or 24.04 points, to 7754.62 but the FTSE 250 fell 0.4 percent, or 77.93 points, to 19188.37.
It came as data showed the UK had managed to avoid a recession in the first quarter of this year, despite being held back by strikes and cost-of-living tightness.
The figures showed that the UK economy grew by 0.1 percent in the three months to the end of March, showing more resilience than economists had expected.
Ruth Gregory, UK deputy chief economist at Capital Economics, said: “There is still no recession, but with the full resistance of higher interest rates not yet felt, it is too early to say anything.”
The Bank of England on Thursday abandoned recession forecasts and raised its outlook for the next three years, though it still forecast growth to be weak. Chancellor Jeremy Hunt said: “It is good news that the economy is growing, but to meet the government’s growth priority we need to remain focused on competitive taxation, labor supply and productivity.”
Beazley rose 3 percent, or 17.5 pence, to 604 pence after a sharp rise in net quarterly premiums. Gross written premiums for insurer Lloyd’s of London rose 12 percent to £1.1 billion in the first three months of the year.
But Johnnie Walker and Guinness maker Diageo fell 2.4 percent, or 85 pence, to 3534.5p after broker Jefferies turned bearish on the stock.
Rolls-Royce shares recovered some of the losses from the previous session, rising 1.6 percent, or 2.4 pence, to 148.3 pence, after falling nearly 7 percent on Thursday. The selloff came even as boss Tufan Erginbilgic said the recovery is now “gaining momentum.”
However, there seemed to be disappointment that this was not accompanied by an upgrade in forecasts. But in keeping with its status as one of the best-performing blue-chip stocks of the year, shares rose yesterday.