Investors back GSK’s Haleon spin-off plan
Vote paves way for biggest stock market debut in a decade
INVESTORS in GlaxosmithKline have waved through the planned demerger of its consumer health business – paving the way for one of the biggest London stock market debuts in more than a decade.
A vote on the split was almost unanimously backed at a general meeting, meaning the newly demerged division, called Haleon, will list on the market as planned on July 18.
The demerger is a key plank of a turnaround strategy spearheaded by GsK boss Emma Walmsley as she tries to shift its focus towards drugs and vaccines and boost its flagging share price amid pressure from investors.
Haleon, which owns brands including sensodyne toothpaste and Panadol painkiller, was previously expected by the city to be valued at between £38bn and £45bn when it makes its market debut – enough to catapult it straight into the FTsE 100.
However, this valuation came under question from some analysts as the split drew closer.
Analysts at credit suisse estimate Haleon would have a value of just over £33bn.
Haleon will take on £10.3bn worth of GsK debt as part of the demerger, according to analysts at Barclays, around four times its estimated earnings for this year.
There is also speculation the firm could immediately become a takeover target after a £50bn offer by consumer goods giant Unilever was slapped down in January. swiss giant Nestle also considered making a bid this year but backed out.
The demerger is expected to generate bumper paydays for its new boss and advisers who worked on the deal.
Brian McNamara, the current boss of the consumer division who will head Haleon after the demerger, will see his maximum pay packet expand to £10.4m per year from its level of £4.4m.
Meanwhile, Dave Lewis, the former head of Tesco who has been recruited as Haleon’s chairman, will be paid £700,000 a year.
Bankers and lawyers are expected to rake in around £500m from costs related to the split, the stock market listing and other transactions.
Walmsley, 53, has battled criticism from shareholders who have criticised her plans.
Activist investor Elliott Advisors pushed for GsK to sell Haleon rather than pursue a stock market listing, and questioned Walmsley’s ability to lead, citing her lack of a scientific background. A failure to get ahead in the race for a covid vaccine also irritated shareholders as GsK was left in the dust by its main UK rival AstraZeneca.
But Walmsley has mostly seen off critics and pushed ahead with plans to bolster a pipeline of new drugs and vaccines. It has embarked on a flurry of acquisitions, snapping up Boston vaccine maker Affinivax for £2.4bn in May and cancer drug group sierra oncology, for £1.5bn, in April.