GSK sells half its stake in Aspen, stock tumbles
GLAXOSMITHKLINE sold half its stake in Aspen Pharmacare of South Africa for R10.5 billion to invest in new priorities as the UK’s largest drugmaker reorganises.
Glaxo sold about 28.2 million shares in Africa’s largest pharmaceutical manufacturer through institutional investors for R372 a share, JohannesburgAspen said on Friday. That’s almost eight times their value when they were issued to Glaxo six years ago. Aspen stock fell as much as 6 percent, the most since June.
Glaxo is reorganising amid a slump in sales and profit as its best-selling product, the asthma drug Advair, faces increased competition in the US. The company completed a deal with Novartis last year to sell its oncology franchise and acquire the Swiss drugmaker’s vaccines business. Glaxo sold the same number of Aspen shares in November 2013, raising about R7bn. Its stake is now about 6.2 percent. The company could not sell more shares for at least 180 days, Glaxo said.
“Our investment in the company has grown in value significantly,” Glaxo chief financial officer Simon Dingemans said last week. “As we continue to reshape the group around our core franchises and drive the benefits from the Novartis transaction, optimising our financial flexibility to invest behind these priorities is key.”
Aspen issued shares to Glaxo in May 2009 in return for the rights to distribute the London-based drugmaker’s products in South Africa and as part of an agreement to market and sell medicines in sub-Saharan Africa. The stock traded at R48 that day.
Aspen, which supplies medicines in about 150 countries, has spent more than $2bn (R25bn) in the last two years, buying assets from Londonbased Glaxo and Merck to expand its geographic reach. The stock has climbed 37 percent in the last year, and traded 4.43 percent lower at R388.50 at the JSE close on Friday. Glaxo’s shares traded 0.2 percent lower at £15.45 in London. Citigroup and UBS acted as joint bookrunners for the share sale. – Bloomberg eNCA’s pan-Africa television division was to be reviewed with its closure a possibility, owner Sabido Investments said on Friday. “Sabido Investments regrets to announce that it has decided to commence discussions with affected staff which may lead to the closure of two loss-making parts of its business,” spokesman Vasili Vass said. “The first affects the natural history unit and the factual division of Sabido Productions. These operations have been incurring sustained losses for many years and do not appear to have the potential to turn around in the future.” The second was eNCA’s pan-Africa television division. The review had been forced by the closure of the news broadcast on the Sky digital platform in the UK last year and the cessation of news broadcasts to the UK’s Africa Channel early this year. The review would determine whether the channel had any other viable routes to operational sustainability, and whether the Africa news service was sustainable as a separate business division. “Discussions with personnel have commenced in both these areas. Where possible, staff have already or will be absorbed into other areas of the business,” Vass said. – Sapa
SEKUNJALO