Announcement involving sale to GlaxoSmithkline

[idpickering]

Novartis announced today that it has entered into an agreement with GlaxoSmithKline plc (GSK) to divest its 36.5 percent stake in its consumer healthcare joint venture (JV) to GSK for USD13.0 billion. The sale will enable Novartis to further focus on the development and growth of its core businesses.

https://www.investegate.co.uk/novartis- ... 0006H9532/

And:

https://www.investegate.co.uk/glaxosmit ... 00020038J/

[Dod101]

Thanks Ian. Whether this is a good thing for Glaxo shareholders or not I do not know since Glaxo is not the initiator of this deal. It does though as they say remove the uncertainty for Glaxo of when or if Novartis would exercise their option and to that extent is probably helpful. I wonder what the market will make of it?

Dod

[idpickering]

Thanks Ian. Whether this is a good thing for Glaxo shareholders or not I do not know since Glaxo is not the initiator of this deal. It does though as they say remove the uncertainty for Glaxo of when or if Novartis would exercise their option and to that extent is probably helpful. I wonder what the market will make of it?

Dod

You're welcome Dod. I first heard about this whilst watching Bloomberg earlier today, and the presenters were very excited to see how GSK goes on market opening today. We'll see.

Ian.

[monabri]

I thought the "threat" was that Novartis exercise their option and this would mean extra debt for GSK...thus leading to the possibility of a dividend cull.

GSK recently pulled out of a potential buy of a part of the Pfizer business..that too would have meant more debt. That would have been two extra large chunks of debt.

Neither of the above two events are "new" and thus would not be considered a surprise.


Link to an earlier discussion on the GSK/ Novartis option.
viewtopic.php?f=15&t=9091&hilit=Gsk#p105246

( Discussed under a topic of AZN !!).

[idpickering]

Quite obviously well received on the market, as GSK are up 2.8% currently.

I do realise there may well be other reasons for the uptick of course, before the more over-zealous amongst us picks me up on it.

Ian.

[monabri]

The Novartis deal is $2 billion lower than the figure discussed within this earlier note ($13b v $15b).

https://www.reuters.com/article/us-gsk- ... SKBN1CU1HF

[idpickering]

I'm glad (lucky) to have topped up my GSK holdings last month. GSK up 6.7% currently. It's not HYP, but there may be something in contrarian investing. Imperial Brands anyone.

Ian.

[idpickering]

This TMF author is keen on GSK today;

Why I’d buy 6% yielder GlaxoSmithKline plc for my ISA after this news

https://www.fool.co.uk/investing/2018/0 ... this-news/

[Bouleversee]

I'm glad (lucky) to have topped up my GSK holdings last month. GSK up 6.7% currently. It's not HYP, but there may be something in contrarian investing. Imperial Brands anyone.

Ian.

See my post on the IMB thread.