GSK initiates voluntary open offer to increase stake in its pharmaceuticals
subsidiary in India
GlaxoSmithKline ("GSK") (LSE: GSK) today announced a Voluntary Open Offer (the
"Offer") to increase its stake in its publicly-listed pharmaceuticals
subsidiary in India (GlaxoSmithKline Pharmaceuticals Limited, the "Company")
from 50.7% to up to 75% at a price of INR 3,100 per share. Securities
regulations in India require a minimum public shareholding of 25% for a company
to maintain a public listing in the country. GSK intends to keep the Company
The Offer, which is made pursuant to the rules of the Securities and Exchange
Board of India (SEBI), is to acquire up to 20,609,774 shares, representing
24.3% of the total outstanding shares of the Indian Company. The Offer
represents a premium of approximately 26% to the Company's closing share price
on the National Stock Exchange of India Ltd (NSE) on 13 December, 2013. This
closing price represents an appreciation of 19% over the last 12 months. The
potential total value of the transaction at the Offer price is approximately
INR 64 billion or £629 million.
David Redfern, Chief Strategy Officer, GSK said: "For GSK this transaction will
increase exposure to a strategically important market and for our Indian
pharmaceuticals subsidiary's shareholders we believe it offers a good liquidity
opportunity at an attractive premium.
"GSK has a proud heritage in India. Today's announcement is a further
demonstration of our long-term commitment to the country having increased our
holding in our consumer business earlier this year and more recently committed
to a significant manufacturing investment."
The transaction 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's Indian pharmaceuticals subsidiary manufactures, distributes and
commercialises pharmaceuticals and vaccines across multiple therapeutic areas
including respiratory, cardiovascular, oncology, anti-infectives and
dermatology. The Company employs more than 5,000 people across its operations
and generated more than INR 26 billion turnover in the financial year ended 31
December 2012 (approximately £313 million at 2012 average exchange rates).
The Company's profit before tax in the financial year ended 31 December, 2012
was approximately INR 9.8 billion (approximately £116 million at 2012 average
exchange rates) and approximately INR 5.6 billion after tax and exceptional
items (approximately £66 million at 2012 average exchange rates).
Subject to regulatory clearance, the Offer period is expected to begin in
February 2014. Payment for the shares will take place shortly after close of
the Offer. The Company's shares are traded on the Bombay Stock Exchange Ltd
(Scrip Code: 500660) and the NSE (Symbol:GLAXO).
The details of the Offer can be found in the public announcement which will
shortly be available at www.sebi.gov.in<http://www.sebi.gov.in>,
www.nseindia.com<http://www.nseindia.com>, and the detailed public statement
and letter of offer which will be filed in connection with the Offer with SEBI
and the relevant stock exchanges.
The Offer is being managed by HSBC Securities and Capital Markets (India)
Press spacebar to pause and continue. Press esc to stop.