10th Mar 2014 07:48
LONDON (Alliance News) - Drugs giant GlaxoSmithKline PLC Monday launched the GBP629 million open offer to increase its stake in its Indian unit to 75%, from 50.7%, a deal it had announced back in September.
In a statement, the company said it will offer INR3,100 a share for up to 20.6 million shares in GlaxoSmithKline Pharmaceuticals Ltd, or a maximum 24.3% stake. It said the offer is a premium of about 26% to the Indian unit's share price on December 13.
Under Indian listing rules, a listed company needs to have a minimum free float of 25% and Glaxo wants to maintain a separate listing for the unit.
"For GSK this transaction will increase exposure to a strategically important market and for our Indian pharmaceuticals subsidiary's shareholders we believe it offers a good liquidity opportunity at an attractive premium," Glaxo Chief Strategy Officer David Redfern said in a statement.
Glaxo said it will fund the stake buy from existing cash resources and it won't affect its long-term share buyback programme. It said the deal with be earnings neutral in the first year and then lift earnings from year two.
The company had first said in mid-December that it intended to take a 75% stake in its Indian unit. The terms of the offer are unchanged from those it set out at that time.
By Steve McGrath; [email protected]; @SteveMcGrath1
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