GSK/HLN split25 Jul 2022 15:50
Now that the dust has settled (and I managed to cross from Calais to Dover on my return to UK with no problem!!_going against the crowd has it's advantages)I thought I'd try to sum up the effect of the split for shareholders.Some of this you will all know but for completeness I think it's worth doing.
So, as much trailed the split was effected on 18 July and what was split off was the consumer healthcare business of GSK of which 68% was held by GSK and 32% by Pfizer. For every GSK share you held at the close you got the equivalent number of shares in HLN,which opened at 308p (and is pretty much the same now).Subsequently , and for no other reason (IMV) than to fool individual shareholders GSK performed a 1:1.25 stock split, ie your number of shares in GSK fell by a quarter , the intention of which was to make their value the same as pre-split, and hence your holding in GSK worth exactly the same.You may wonder why they bothered , my suspicions are noted above.
It is important to note that Pfizer still holds its 38% in Haleon and that it is committed to selling that down over time. The inevitable effect of this is that the Haleon SP will struggle, a large persistent seller is not what you want.
At the moment, the GSK SP is holding broadly steady and if you continue to hold you will get a divi rebased to meet the changes of 27.5p for the 2nd half of 2022 (which is again exactly the same as previously and next years divis are planned to be 56.25p(again as previously planned-though well short of the historical average)
Now to the really bad news, the division spun off (ie Haleon) is pretty much exactly what ULVR bid up to £50 billion for in January, a bid which GSK rejected - the now-independant HLN's current market value is £29.2 bill !!.
As a Holder of ULVR and GSK, I said at the time that I though both ULVR and GSK had screwed up, but in the event it is GSK's refusal that looks an appallingly poor decision , and remember those same directors are still running the "new GSK"
I sold out of both companies a few months ago and am glad to have done so, HLN is uninvestable until Pfizer clear off and GSK's management will not be trusted by the market until changes occur.
That said, GLA
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