Ansell slips condoms business to Chinese consortium

Citic Capital for $US600 million ($805 million).

The listed company will use much of the proceeds in a $US265 million share buyback.

Ansell shares jumped more than 4 per cent after the disposal was announced yesterday.

“We are delighted with this outcome, following a thorough and competitive process,” Ansell chief Magnus Nicolin said.

The deal “realises significant value for Ansell shareholders”, he said. “We see Humanwell as a natural home for the business and wish them well with their purchase.”

Ansell announced a review of its sexual wellness business – the company’s oldest and smallest division – last August as it moved to focus on its main operations in industrial and medical protective equipment.

Sexual wellness was a strong-performing business but the only part of Ansell’s operations that was consumeroriented, with other divisions targeted at businesses.

Ansell will buy back up to 10 per cent of its shares on issue – about 14.75 million – over the next year.

The Melbourne-based company expects a net profit on the sexual wellness business of about $US365 million after the deal is completed by September 30, subject to regulatory approvals.

The divestment includes all of Ansell’s condom and lubricant businesses and manufacturing globally, except for a loss-making joint venture in India.

Citi analyst Victor Windeyer said the price was about 10 per cent lower than expected but the buyback represented a better use of the cash than any acquisition available to Ansell.

Nonetheless, with Ansell shares up almost 70 per cent since February, he maintained his “sell” rating on the stock.

“Even our most optimistic scenarios didn’t justify the current share price,” Mr Windeyer wrote in a note for investors.

Ansell shares closed at $25.18, up $1.04, or 4.3 per cent