GlaxoSmithKline has appointed investment banks to advise on a potential part-flotation of its HIV division as the drugmaker seeks to move on from a gruelling year in 2014.
GSK has hired Citi, Goldman Sachs and Morgan Stanley as advisers on an initial public offering (IPO) for ViiV Healthcare, which analysts have said could be valued at around £15bn.
Sir Andrew Witty, GSK’s chief executive, said the company would decide by the middle of this year whether to float ViiV. He said matters to consider included how much of the business to sell and where to list the shares. The company would then decide on a management team before a listing next year.
“All the advice we have received is they need to have time to talk to potential investors in that business well in advance of the potential floatation. By the time you have done that you are now into 2016. That is a very practical timeframe.”
GSK said in October it was considering a float of the fast-growing HIV division as part of a plan to restructure its business. It owns almost 80% of ViiV, with Pfizer of the US and Japan’s Shionogi holding the rest.
Witty, under pressure over disappointing financial performance, set out the path for the potential ViiV IPO as Glaxo announced fourth-quarter revenues down 8% to £6.19bn, in line with market forecasts. Core operating profit fell 12% to £1.77bn. Core earnings per share for the three months to 31 December fell 6% to 27.3p, ahead of forecasts for 25.9p after GSK cut costs.
Witty said GSK had had a difficult 2014, when its business struggled and it was beset by a bribery scandal in China. He said after a year of declining revenues for its respiratory drugs in the US, sales had picked up in January.
The company declined to comment on the appointment of the investment banks.
