Diversified British healthcare company, GlaxoSmithKline PLC successfully acquired 24.33 per cent in its Indian subsidiary GlaxoSmithKline Pharmaceuticals (GSK Pharma) from public shareholders via a voluntary open offer, helping the parent company raise its stake to 75 per cent. The Rs 6,389 crore-buyback was subscribed nearly 1.13 times, sources said. More than 2.32 crore shares were tendered by shareholders, a majority of which were retail investors, against the proposal to buy 2.06 crore shares – at a price of Rs 3,100 per share.
The offer was solely managed by HSBC Securities and Capital Markets (India). The acquisition further increases GSK PLC’s exposure in a strategically important and highly-populated market like India. The British healthcare conglomerate intends to keep its Indian subsidiary listed on the stock exchanges, the company said in an exchange filing, citing “future growth prospects” as well as “GSK’s long-standing commitment to the country”.
Even as long-term growth looks positive, analysts said that a majority of retail and minority shareholders were compelled to tender shares due to earnings contraction in calendar 2013, a weaker outlook for calendar 2014, and high valuations compelled amid expectation the stock may witness a sharp correction after the conclusion of the offer.
GSK shares were down 5.27 per cent to close at Rs 2,509.80 on the BSE. FE