Headache for Haleon which will start life with £10bn debt
GLAXOSMITHKLINE’S consumer healthcare arm will immediately be saddled with billions in debt when it is split from the pharma giant later this month, the Daily Mail can reveal.
Haleon, which owns brands including Sensodyne toothpaste and Panadol painkillers, will make its debut as a separate company on the London stock market on July 18 after a shareholder vote on the split tomorrow that is widely expected to be waved through.
But the firm will start life with a large amount of debt hanging over its balance sheet, according to analysts at Barclays.
The investment bank has estimated Haleon will have a ‘significant’ debt load of around £10.3bn when it lists as a separate company, around four times its estimated earnings for this year. It was also flagged up by analysts at broker Jefferies, who said the amount of debt was ‘notably high’ by stock market standards.
However, they went on to say Haleon could benefit from its position as a ‘largely unique asset’ on the London and global stock markets which would provide it with ‘real scarcity value’ that could boost the share price.
The City expects Haleon to fetch a valuation in the range of £38bn to £45bn when it lists next month, although GSK previously slapped down a £50bn bid for the business by consumer goods giant Unilever, saying it undervalued Haleon’s prospects.
Swiss giant Nestle also considered making a bid earlier this year in what would have been its biggest deal ever, but backed out.
The demerger is a milestone in a strategy spearheaded by GSK boss Emma Walmsley, who is trying to refocus the FTSE 100 firm on its vaccine and drug development capabilities and boost its share price.
GSK shares rose 1pc, or 17p, to 1802.6p.