GlaxoSmithKline (LON:GSK) has kicked off the sale of some consumer health brands as it seeks to raise about £1 billion, Reuters has reported. The news comes as the blue-chip drugmaker prepares to press ahead with a spinoff of its consumer healthcare business in the wake of its deal with US peer Pfizer.
GSK’s share price has been steady in London in today’s session, having added 0.22 percent to 1,608.60p as of 08:57 BST. The advance is largely in line with gains in the broader UK market, with the benchmark FTSE 100 index currently standing 0.17 percent higher at 7,416.02 points. The group’s shares have added more than three percent to their value over the past year, as compared with a near three-percent fall in the Footsie.
GSK to sell some consumer brands
Sources with knowledge of the matter told Reuters that GSK has bundled the non-core drugs into three different portfolios and has hired boutique investment bank Greenhill to market the products to separate bidders. The people noted that information packages for two portfolios consisting of Latin American drugs and Physiogel skin care products were sent out to prospective suitors earlier this week, while the sale of a third portfolio of European drugs will kick off after the summer amid strong interest from private equity investors.
Prospective bidders for assets
The sources further told Reuters that private equity funds including Advent are expected to bid for the European assets, with other prospective bidders potentially including CVC Capital Partners, along with a consortium of Bain Capital and Cinven.
The Latin American portfolio, which has a strong presence in countries like Mexico and Argentina, is reportedly expected to be sold to local industry players, while the Physiogel portfolio may draw interest from Asian companies since it includes GSK’s branded skincare products with a strong presence across Asia.
Morgan Stanley resumed coverage of the blue-chip drugmaker last week with an ‘underweight’ rating and a target on the GSK share price of 1,520p, arguing that the company is “very much a work in progress”.