* Firms such as Advent, CVC, KKR interested in GSK unit -
BBG
* GSK says 'far advanced' with plans to separate consumer
arm
* Drugmaker says 'firmly' on track for split in mid-2022
(Adds detail throughout)
By Pushkala Aripaka and Ludwig Burger
Oct 12 (Reuters) - GlaxoSmithKline is "firmly on
track" to spin off its consumer health business next year, the
British drugmaker said on Tuesday, after Bloomberg News reported
the unit could attract bids from private equity firms such as
Advent, CVC and KKR.
The division, which makes Sensodyne toothpaste, and Advil
and Panadol painkillers, could also draw interest from big
pharmaceutical and consumer goods companies, the report said https://www.bloomberg.com/news/articles/2021-10-12/glaxo-s-54-billion-consumer-arm-is-said-to-draw-buyout-interest,
citing unidentified people with knowledge of the matter.
It added the unit could be valued at 40 billion pounds ($54
billion) or more.
A GSK spokesperson declined to comment on whether the
company had received takeover interest in the division, a joint
venture with U.S. drugmaker Pfizer.
The report sent London-listed GSK's shares as much as 4.8%
higher to 1,460.2 pence.
"GSK is far advanced with its plan for the separation of
Consumer Healthcare," the GSK representative said, adding the
drugmaker was on course for the split in mid-2022.
The company set out plans in June to turn the consumer arm
into a separately listed company to focus on its underperforming
drugs business, and has defended those plans after activist
investor Elliott suggested some changes https://www.reuters.com/business/healthcare-pharmaceuticals/activist-investor-elliotts-five-proposals-gsk-2021-07-01
- including that GSK remained open to potentially selling the
consumer business.
"The feedback we have received from our shareholders is that
they are very keen to own the new Consumer Healthcare company as
a listed entity through the demerger ... The GSK board will
fulfil its fiduciary duties to evaluate any alternative
options," GSK's spokesperson said.
Under GSK's plan, shareholders will receive stock in the new
consumer health group amounting to at least 80% of the 68% stake
that GSK currently owns in it. Pfizer owns the remaining 32%.
New GSK would sell the remaining 20% stake "in a timely
manner," the group has said. Pfizer has also said it would seek
to exit its shareholding.
Elliott, which in July confirmed holding a significant stake
in GSK, said then that a conservative estimate would value GSK's
shareholding in the consumer unit at about 34 billion pounds -
working out to roughly 50 billion pounds overall.
Brokerage Jefferies has valued it at 45 billion pounds.
Another activist investor, Bluebell Capital Partners, which
holds a smaller stake in GSK, said last month the consumer arm
should attract interest from trade buyers and, potentially,
private equity investors.
Elliott has said a sale of the unit to an industry peer
would command a "meaningful premium" to its estimated value due
to potential synergies of up to 10% of the business's revenues.
Separately, Bluebell said in an open letter to GSK Chairman
Jonathan Symonds dated Oct. 11, that both he and Chief Executive
Emma Walmsley should be replaced, voicing disappointment over an
Oct. 7 investor event.
"We completely reject the content and claims made in this
letter, which are not representative of the discussion at the
meeting or the majority of our shareholders' views," GSK said in
response.
(Reporting by Pushkala Aripaka in Bengaluru and Ludwig Burger
in Frankfurt; Editing by Bernadette Baum and Mark Potter)
Glaxosmithkline (GSK)