GlaxoSmithKline PLC (GSK) - GSK to increase stake in its Nigerian Consumer
RNS Number : 9618R
26 November 2012
Issued: Monday 26 November 2012, London UK - LSE announcement
GSK announces agreement in principle to increase its stake in GlaxoSmithKline
Consumer Nigeria PLC
GlaxoSmithKline plc ("GSK") (LSE: GSK) and GlaxoSmithKline Consumer Nigeria
PLC ("GSK Nigeria" or the "Company") today announced that they have reached
agreement in principle on the terms of a proposal whereby GSK would increase
its ownership in the Company from 46.4% to 80% (the "Proposal"). A minimum
public shareholding of 20% is required for a company to maintain a listing on
the Nigerian Stock Exchange.
Under the terms of the Proposal, GSK would acquire approximately 321 million
shares in the Company on a pro rata basis from public shareholders, at an
offer price of NGN 48 per share. It is intended that the Proposal be effected
by way of a Scheme of Arrangement.
GSK Nigeria is engaged in the manufacture, marketing and distribution of a
wide range of Consumer Healthcare brands including Panadol, Sensodyne,
Horlicks and Lucozade. In addition the Company also sells several
pharmaceutical products including antibiotics such as Augmentin and vaccines.
Approximately 70% of the revenue is from Consumer Healthcare Brands and 30%
from Pharmaceuticals and Vaccines.
The Proposal represents a premium of 28% to the Company's closing share price
on 23 November, 2012. The total value of the transaction at the offer price
is approximately NGN 15.4 billion (£62 million).
Chief Olusegun Osunkeye, Chairman, GSK Nigeria said: "The Board of Directors
unanimously believes that the Proposal is in the best interests of the
continued growth of the Company, the shareholders, employees and customers,
the community and Nigeria and intends to recommend it to shareholders."
David Redfern, Chief Strategy Officer, GSK said: "This Proposal to increase
GSK's ownership of GlaxoSmithKline Consumer Nigeria reiterates our long term
support of the Company's strategy and our confidence in the continuing growth
prospects of the business."
The transaction will be funded through GSK's existing cash resources, will be
modestly earnings accretive immediately, and will not impact expectations for
the Group's long-term share buyback programme.
The Company generated turnover of over NGN 21.5 billion in 2011 with a
Compound Annual Growth Rate (CAGR) over the past four years of 21%.
The Proposal will be subject to requisite shareholder, regulatory and Court
approvals including those of The Nigerian Stock Exchange and the Securities
and Exchange Commission.
Citigroup Global Markets Limited is acting as financial adviser to GSK.
V A Whyte
26 November 2012
GSK will continue to consolidate 100% of the results and net assets of GSK
Nigeria, but the share of profits due to the non-controlling interests and the
non-controlling interests balance in the balance sheet will both be lower
after the transaction. GSK will record no gain or loss on the acquisition,
with the accounting entries being recorded in non-controlling interests and
GlaxoSmithKline - one of the world's leading research-based pharmaceutical and
healthcare companies - is committed to improving the quality of human life by
enabling people to do more, feel better and live longer. For further
information please visit www.gsk.com
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Under the safe harbor provisions of the U.S. Private Securities Litigation
Reform Act of 1995, GSK cautions investors that any forward-looking statements
or projections made by GSK, including those made in this announcement, are
subject to risks and uncertainties that may cause actual results to differ
materially from those projected. Factors that may affect GSK's operations are
described under 'Risk factors' in the 'Financial review & risk' section in the
GSK Annual Report 2011 included as exhibit 15.2 to the company's Annual Report
on Form 20-F for 2011.
This announcement does not represent the announcement of a definitive
agreement toproceed with the Proposalandaccordingly, there can be no
certainty thatthe Proposal will proceed. GSK reserves the right not to
proceed with the Proposal or to vary the terms of the Proposal in any way.
This announcement is not intended to, and does not, constitute or form part of
any offer, invitation or the solicitation of an offer to purchase, otherwise
acquire, subscribe for, sell or otherwise dispose of, any securities whether
pursuant to this announcement or otherwise. The distribution of this
announcement incertain jurisdictions may be restricted by law and therefore
persons into whose possession this announcement comes should inform themselves
about, and observe such restrictions. Any failure to comply with the
restrictions may constitute a violation of the securities law of any such
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MSCEAFFKAADAFEF -0- Nov/26/2012 07:00 GMT
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