MARKET REPORT: GSK lands windfall of over £800m as it begins selling down its stake in Sensodyne toothpaste maker Haleon
GSK landed a windfall of over £800million as it began selling down its stake in Sensodyne toothpaste maker Haleon.
The FTSE 100 pharma giant offloaded around 240million shares in the consumer health group, equivalent to a 2.6 per cent stake in the business.
GSK sold the shares at 335p each, a 2.3 per cent discount to Haleon’s previous closing price, for a total haul of £804million.
Haleon, which also makes Panadol painkillers and Centrum vitamins, was spun out of GSK in July last year in the biggest European stock market listing for more than a decade.
After initially listing at 330p, the shares have since risen around 4.5 per cent. GSK retained a 12.9 per cent stake after the demerger and following the recent share sale still controls 10.4 per cent of the company.
Windfall: The FTSE 100 pharma giant offloaded around 240m shares in the consumer health group
As the sale had been expected, Haleon shares were little moved during the session, inching up 0.04 per cent, or 0.15p, to 343p.
GSK’s move to offload part of its stake followed reports earlier this month that US rival Pfizer, which owns nearly 26 per cent of Haleon, would start doing the same.
Pfizer’s finance chief David Denton previously said the company would begin selling its stake in a ‘slow and methodical’ manner. Following the GSK sale, both firms have pledged not to dispose of any more stock for at least 60 days.
‘They both said they would sell down their positions in time, but the ease at which GSK has placed 240million shares in Haleon would suggest it won’t have a problem selling the remaining 10.3 per cent stake in the business,’ said AJ Bell investment director Russ Mould.
GSK also benefited after a Canadian court threw out a proposed class action lawsuit connected to its heartburn drug Zantac. The British Columbia Supreme Court ruled there was little evidence the drug led to an increased risk of cancer. GSK shares rose 1.8 per cent, or 25.4p, to 1470.2p.
The FTSE 100 climbed 0.3 per cent, or 24.04 points, to 7754.62 but the FTSE 250 slid 0.4 per cent, or 77.93 points, to 19188.37.
It came as data showed the UK had managed to avoid recession in the first quarter of this year despite being held back by strikes and the cost-of-living squeeze.
The figures showed Britain’s economy grew 0.1 per cent in the three months to the end of March, showing more resilience than economists had expected.
Ruth Gregory, deputy chief UK economist at Capital Economics, said: ‘There’s still no recession, but with the full drag from higher interest rates yet to be felt it is too soon to sound the all-clear.’
The Bank of England on Thursday ditched recession forecasts and upgraded its outlook over the next three years though still predicted that growth would be weak. Chancellor Jeremy Hunt said: ‘It’s good news that the economy is growing but to reach the Government’s growth priority we need to stay focused on competitive taxes, labour supply and productivity.’
Beazley rose 3 per cent, or 17.5p, to 604p after reporting a sharp jump in quarterly net premiums. The Lloyd’s of London insurer’s gross written premiums rose 12 per cent to £1.1bn in the first three months of the year.
But Johnnie Walker and Guinness maker Diageo fell 2.4 per cent, or 85p, to 3534.5p after broker Jefferies turned bearish on the stock.
Rolls-Royce shares recovered some of the previous session’s losses, rising 1.6 per cent, or 2.4p, to 148.3p having fallen nearly 7 per cent on Thursday. The sell-off came even as boss Tufan Erginbilgic said the recovery is now ‘moving at pace’.
There seemed to be disappointment, however, that this was not accompanied by an upgrade to forecasts. But in keeping with its status as one of the best performing blue-chip stocks of the year, the shares were on the rise yesterday.
