Investors in GlaxoSmithKline have spoken of their concern that the company will launch an IPO of its consumer brands business next year which will dilute their stakes in the business.
Chief executive Emma Walmsley has said she will separate off the consumer side of the company, which includes brands such as Nicorette, Panadol and Sensodyne, as part of her shake-up of the business.
Walmsley’s restructuring of the drugs giant has come under increasing scrutiny due to a flagging share price, its late arrival to launching covid vaccines and the emergence of activist investor Elliott as a shareholder.
While investors broadly support the plan, some are increasingly concerned she will float the business off on the stock market to raise money from new investors.
Such a move would “dilute” their shareholdings in a business, meaning they would have to buy more shares if they want to retain their current percentage holdings.
GSK has been careful not to comment on how it plans to separate the consumer arm and declined to comment when asked today, leaving fund managers concerned about its intentions.
“We want them to be clear that this would be a demerger, with us continuing to own it,” said one investor, “not a deal where we have to pay more for what we already own.”
He said he was concerned GSK may raise funds from a consumer IPO to invest in acquisitions to boost its pharmaceuticals pipeline.
Investors have been speculating about what Elliott plans to demand of GSK’s management.
Yesterday, it emerged that it had been meeting shareholders and told them it was not looking to demand cuts to research and development or a sale of the vaccines or pharmaceuticals division.
