GlaxoSmithKline (GSK) said today it set a timeframe of February 18 to March 5 for its INR 64 billion ($1.026 billion) tender offer to raise its stake in its publicly listed pharmaceuticals subsidiary in India.
The tender offer—disclosed in a notice to stock exchanges on which company shares are traded—is intended to increase GSK’s stake in GlaxoSmithKline Pharmaceuticals Limited from 50.7% to 75%, at a price of INR 3,100 ($49.66) per share.
The offer represents a 26% premium above GSK Pharma’s closing price on the National Stock Exchange of India on December 13, 2013, the last weekday before the deal was announced on December 16.
GSK has said its tender offer reflects an increased commitment to India—a commitment the company said was also reflected in an earlier offer to raise its stake in its Indian Consumer Healthcare subsidiary 43.2% to up to 75% in a deal valued at INR 52.2 billion ($837.8 million), as well as plans announced last year to build a new INR 8.64 billon ($138.66 million) manufacturing plant in that nation.
“Though there are regulatory challenges, India has strong fundamentals and there are substantial volume opportunities here,” David Redfern, chief strategy officer, GSK, told the Indian newspaper Business Standard back in December. “We keep launching products from our global vaccine portfolio here and will look for organic growth in future.”
Redfern said GSK has ruled out acquiring any other domestic company in India in the near future, the newspaper reported.
During 2013, India accounted for a 7% sales decline in pharmaceuticals and vaccines, to £220 million (about $361 million), despite a 1% total increase to £4.698 billion ($7.707 billion) in pharma and vaccine sales in GSK’s Emerging Markets Asia Pacific (EMAP) region.
The company finished the fourth quarter with core revenue of £6.906 billion ($11.331 billion), up 2% from Q4 2012 (but up 5% at constant exchange rates or CER), and £2.088 billion ($3.427 billion) in core operating profits, an 8% dip (but only down 1% at CER) from a year earlier. Core figures exclude amortization and impairment, restructuring costs, legal charges and expenses, and acquisition accounting adjustments.
For all of 2013, GSK saw core operating profit fall by 3% (flat at CER) to £8.015 billion ($13.153 billion), on core revenue that stayed flat (or climbed 1% at CER) to L26.505 billion ($43.497 billion).
