September 30, 2023

GSK made a windfall of over £800m when it began selling its stake in toothpaste maker Sensodyne Haleon.

The FTSE 100-listed pharmaceutical giant sold about 240 million shares of the consumer health products group, equivalent to a 2.6% stake in the business.

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GSK sold the shares at 335p each, a 2.3% discount from Haleon’s previous closing price, for a total of £804m.

Haleon, which also makes Panadol painkillers and Centrum vitamins, was spun off from GSK last July and entered Europe’s biggest stock market in more than a decade.

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After initially listing at 330p, the shares have since risen about 4.5%. GSK retained a 12.9% stake after the split and, following a recent share sale, still controls a 10.4% stake in the company.

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Windfall: The FTSE 100 pharmaceutical giant has sold about 240 million shares in the consumer health group.

As expected, Haleon’s shares were almost unchanged during the session, climbing 0.04%, or 0.15 pence, to 343 pence.

GSK’s decision to sell part of its stake follows reports earlier this month that US rival Pfizer, which owns nearly 26% of Haleon, will do the same.

Pfizer CFO David Denton said earlier that the company would start selling its stake “slowly and methodically.” Following the sale of GSK, both firms pledged not to sell any more shares for at least 60 days.

“They both said they would sell their positions over time, but the ease with which GSK placed 240 million shares in Haleon suggests that it will have no problem selling the remaining 10.3% stake in the business,” AJ Bell said. Directed by Russ Mold.

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GSK also won after a Canadian court dismissed a proposed class action lawsuit related to its heartburn drug Zantac. The Supreme Court of British Columbia ruled that there was not enough evidence that the drug increased the risk of developing cancer. GSK shares rose 1.8%, or 25.4 pence, to 1,470.2 pence.

The FTSE 100 rose 0.3% or 24.04 points to 7754.62 while the FTSE 250 fell 0.4% or 77.93 points to 19188.37.

This comes after data showed that the UK managed to avoid a recession in the first quarter of this year, despite strikes and falling costs of living.

The figures showed that the UK economy grew by 0.1% in the three months to the end of March, showing more resilience than economists had expected.

Ruth Gregory, Deputy Chief Economist for the UK at Capital Economics, said: “There is still no recession, but with higher interest rates not fully resisted yet, it’s too early for full clarity.”

The Bank of England abandoned recession forecasts on Thursday and raised its forecast for the next three years, although it still predicted growth to be weak. Chancellor Jeremy Hunt said: “It’s good news that the economy is growing, but to achieve the government’s growth priority, we must focus on competitive taxes, labor supply and productivity.”

Beasley’s shares rose 3%, or 17.5 pence, to 604 pence after reporting a sharp jump in quarterly net premiums. Gross premiums from London-based insurer Lloyd’s rose 12% to £1.1bn in the first three months of the year.

Shares of Johnnie Walker and manufacturer Guinness Diageo fell 2.4%, or 85 pence, to 3534.5 pence after broker Jeffries turned bearish on the stock.

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Rolls-Royce shares recouped some of the previous session’s losses, climbing 1.6%, or 2.4 pence, to 148.3 pence, falling almost 7% on Thursday. The sell-off came even after boss Tufan Erginbilgić said the recovery is now “advancing at a pace.”

However, there seems to have been disappointment that this was not accompanied by an increase in forecasts. But in keeping with its status as one of the top-grossing blue-chip stocks of the year, the stock was up yesterday.