GSK share price: Company offloading stake in South Africa’s Aspen

on Nov 20, 2013
Updated: Oct 21, 2019
Listen, Wednesday, November 20: GlaxoSmithKline Plc (LON:GSK) is planning to reduce its stake in drugmaker Aspen Pharmacare Holdings Ltd (JSE:APN), Africa’s largest generic drugs maker. Despite the divestment, GSK will retain a significant shareholding as well as a board seat. GSK’s share price closed marginally higher in London yesterday.

**GSK planning to reduce stake in Aspen by one third**
The UK drugmaker said in a statement yesterday that it intended to sell about one-third of its 19 percent stake in Aspen by means of a placing of ordinary shares in Aspen to institutional investors. The offering will comprise 28.2 million ordinary shares in the South African company equivalent to about six percent of Aspen’s issued share capital. The divestment will leave GSK with a stake of about 13 percent. In addition, the UK drugmaker will retain a board seat.

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“GSK has a long and successful partnership with Aspen – and our investment in the company has grown in value significantly over time,” GSK’s Chief Strategy Officer, David Redfern said in the statement. “Having assessed this investment we have now decided to realise some of this value without altering the basis of the partnership.” Reuters reported that based on current market prices, the sale could realise some 7.54 billion rand (£459 million).

Glaxo acquired its stake in Aspen in 2009. Since then, Aspen has bought a number of brands from GSK. In September, the UK drugmaker agreed to sell its thrombosis brands Arixtra and Fraxiparine, as well as its Notre-Dame de Bondeville manufacturing site to Aspen for £700 million in cash. (GSK share price: Selling thrombosis brands to Aspen for £700m)

GSK, which will use the money for general corporate purposes, said that the net profit on the disposal will not be included in core operating profit and core earnings per share in 2013. The company has undertaken not to dispose of any additional shares in Aspen for a period of six months following the sale.
**EC grants marketing authorisation for asthma drug Relvar**

In other GSK news, the company said on Monday that the European Commission had granted marketing authorisation for GSK and Theravance Inc’s (NASDAQ:THRX) Relvar drug for treatment of both asthma and chronic obstructive pulmonary disease (COPD).

The drug which is inhaled through a device called Ellipta was approved by the US Food and Drug Administration in May 2013, under the trade name Breo Ellipta, for use in patients with COPD. GSK noted that the EC approval would trigger a $15 million (£9.3 million) payment to GSK from Theravance, with an additional $15 million due following the launch of Relvar Ellipta in Europe.
**On November 19, buy GSK shares at 1650.00p.**
**On November 19, sell GSK shares at 1613.50p.**
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Prices can go up and down meaning you can get back less than you invest. This is not advice. Dealing services provided by Hargreaves Lansdown.


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