...but shares in pharma giant rally

GLAXOSMITHKLINE shares rose as investors bet on a bidding war for its consumer healthcare arm.

GSK boss Emma Walmsley is spinning off the division – whose brands include Aquafresh, Advil and Chapstick – into a standalone company listed on the stock market in London.

She will then focus on developing cutting edge pharmaceuticals at GSK while keeping a 20pc stake in the new consumer business.

But Unilever looks set to have sparked a bidding war having already seen three offers rejected, including one worth £50bn.

Other consumer health firms are thought to be looking at making rival bids while private equity is also understood to be circling.

Advent International, CVC Capital Partners and KKR have all shown an interest in the firm.

The prospect of a bidding war sent GSK shares up 4.1pc, or 66.8p, to 1707.8p, valuing the whole company at £86bn.

Walmsley must decide whether to press ahead with her original plan to demerge and list the new business, or hold out for a higher offer from Unilever or another bidder. It is thought a price tag of £60bn could tempt GSK to sell.

Walmsley has faced pressure from activist investors Elliott Management, which wants a full sale of the business.

But Richard Buxton, a fund manager at long-term GSK investor Jupiter Asset Management, said she should fend off pressure from activists looking for ‘a quick buck’.

He said: ‘GSK investors should play the long game.’