NEW DELHI: GlaxoSmithKline Plc (GSK) on Thursday concluded a block deal of as high as Rs 25,000 crore in a volatile market. As part of the deal, GSK has sold its entire 5.7 per cent stake in fast-moving consumer goods major Hindustan Unilever Ltd (HUL) to focus on its pharma R&D pipeline including its bets on experimental cancer treatments, amid sluggish revenue growth.
The 5.7 per cent stake in HUL was accepted by GSK Consumer Healthcare Ltd as compensation for the sale of its Horlicks brand and other nutrition brands such as Boost, Maltova and Viva, in December 2018. However, the parent firm offloaded these 13.37 crore shares on average for Rs 1,905 apiece, raising gross proceeds of nearly Rs 25,480 crore — a much higher realisation compared to what it had anticipated in 2018.
“When GSK originally announced the divestment of Horlicks in 2018, the company expected gross proceeds from the overall transaction to be about £3.1 billion (Rs 29,000 crore) and net proceeds to be approx £2.4 billion (Rs 22,440 crore) after hedging costs, taxes and other expenses had been settled,” GSK said in a regulatory filing. With the appreciation of HUL’s share price since then, GSK now expects net proceeds from the divestment to be £2.9 billion (Rs 27,115 crore).
“This includes the proceeds received on the closing of the transaction on April 1, 2020, and the expected proceeds from the sale of our Bangladesh business, which is expected to close later this year,” it added.
According to data provider Refinitiv, the Glaxo block trade will be the tenth ever biggest. The largest-ever block trade remains Naspers’ sale of $9.8 billion worth of Tencent stock in Hong Kong in March 2018. Shares of HUL, meanwhile, skidded 5 per cent in early morning trade to end at Rs 1,992.5, down 0.8 per cent on the Bombay Stock Exchange.