LONDON (Alliance News) - GlaxoSmithKline PLC Wednesday said it has raised GBP425 million by selling about one-third of its stake in Aspen Pharmacare Holdings Ltd, a move that has allowed it to realize some of the recent strong value gain by its South African partner.
Glaxo said it sold a 6.6% stake in Aspen, taking its holding down to 12.4%, at ZAR250 a share, raising ZAR7.06 billion. It confirmed it will not change its overall relationship with Aspen and will retain a seat on its board. It won't sell any more shares for at least six months.
The pharmaceuticals giant had advised investors of the stake sale to institutional investors late Tuesday.
"GSK has a long and successful partnership with Aspen - and our investment in the company has grown in value significantly over time. Having assessed this investment we have now decided to realise some of this value without altering the basis of the partnership," Glaxo Chief Strategy Officer David Redfern said in the statement Tuesday.
"We remain committed to working closely with Aspen as shown by our remaining stake in the company and our board seat," he added.
Glaxo said it will use the proceeds from the sale for general corporate purposes and the profit on the sale won't be included in the group's 2013 operating profit and earnings per share figures.
Glaxo bought a stake in South-Africa based Aspen in 2009 when the companies collaborated in sub-Saharan Africa. Aspen has since bought a number of over-the-counter and prescription brands from Glaxo, most recently thrombosis products Arixtra and Fraxiparine and their associated manufacturing site in France for GBP0.7 billion in cash.
Aspen reported a 27% increase in revenue and 28% increase in operating profit in its last financial year and has been growing strongly outside Africa in regions like Latin America and Asia Pacific. It has also been acquisitive, most recently snapping up molecules and pharmaceutical ingredients manufacturing facilities from MSD and some infant nutrition licenses and production facilities from Nestle in Africa and Latin America.
Aspen shares are up 70.5% in the last 52 weeks alone, having risen for several years.
By Steve McGrath; stevemcgrath@alliancenews.com; @SteveMcGrath1
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Glaxosmithkline (GSK)