16th Feb 2007 07:00
GlaxoSmithKline PLC15 February 2007 Second Quest Post-Paid Variable Sale Forward GlaxoSmithKline plc (the "Group") announced today that it has entered into asecond hedging transaction with Lehman Brothers Finance S.A. with respect to afurther 10 million shares of common stock of Quest Diagnostics Inc ("Quest"),representing approximately 27.4% of the Group's holding in Quest (the "Shares").The Shares were acquired as a result of the sale of the Group's clinicallaboratories business to Quest in 1999. The Group currently holds approximately18.7% of the issued share capital of Quest, with a market value of US$2.0bn. This second hedging transaction is a post-paid variable sale forward ("VSF")with an average term of approximately seven years from today. The transactionhas a floor price of US$52.57 per share and an average appreciation cap ofUS$81.02 per share. The original hedging transaction, which is also a VSF, was entered into in 2002and rolled forward in 2006. The original transaction also covers 10 millionShares, with an average remaining term of approximately four and a half yearsfrom today, a floor of US$49.57 per share and an average cap of US$65.02 pershare. The principal objective of the second VSF is to protect the value of a furtherportion of the Group's shareholding in Quest, by setting a floor price for theShares, whilst allowing the Group a capped participation in any furtherappreciation in the Shares. Whilst the Group has the flexibility to wind-up allor part of the VSF at any time, the Group does not currently expect to realiseany profit under the VSF in the foreseeable future. S M BicknellCompany Secretary 15th February 2007 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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