BRITISH pharmaceutical company GlaxoSmithKline (GSK) said on Thursday that it was selling its last remaining stake in domestic drug maker Aspen Pharmacare for R8.47bn.
The London-based firm said it had successfully completed an accelerated bookbuild for the disposal of its last remaining 28.2-million Aspen shares, representing 6.2% of Aspen’s issued share capital. It offered its stake to institutional investors at R300 a share, a discount on Wednesday’s closing price of R316.87.
The move is in line with expectations, as GSK said three years ago that it planned to sell off the 16% stake it acquired in Aspen in May 2009. It was one of several transactions agreed to by the two companies at the time, which also saw Aspen acquiring the rights to distribute GSK products in SA, and market and sell its medicines in sub-Saharan Africa. The deals were collectively valued at R3.47bn.
The two drug makers subsequently clinched a series of deals in which Aspen acquired niche products from GSK. In the latest transaction, announced earlier in September, Aspen bought a suite of GSK anaesthetics drugs for up to R5.4bn.
Aspen said the products complemented the thrombosis drug portfolio it previously acquired from GSK, and the June acquisition of AstraZeneca’s anaesthetics drugs for up to $770m. It has also bought assets from Merck to help extend its global reach.
GSK’s Aspen strategy has yielded it a tidy profit, as it paid just R48 per share for the 68.5-million ordinary Aspen shares it bought seven years ago. But it has also benefited Aspen, as its share price has risen on the back of its deals to acquire other company’s medicines and manufacturing plants, said Fairtree Capital analyst Jean Pierre Verster.
"There is a question as to who are the clever ones: is it Aspen buying the products and pushing up the value of Aspen? Or is GSK the clever one, selling off not such valuable [assets]? That is still to be tested," he said.
GSK sold its first tranche of Aspen shares in November 2013 for R250 a share, yielding about R7bn. It sold 28.2-million Aspen shares in March 2015 at R372 per share, raising R10.5bn.
Aspen CEO Stephen Saad said GSK’s disposal of its Aspen shares did not affect the ongoing collaboration between the two drug makers in SA, or their other trading relationships. GSK’s chief strategy officer, David Redfern, will remain a member of Aspen’s board of directors.
"We are pleased that Aspen shareholders are relieved of the uncertainty caused by GSK’s stated intention to dispose of its interests," Saad said in a statement.
GSK chief financial officer Simon Dingemans said: "GSK has had a long and successful partnership with Aspen and our investment in the company has grown in value significantly over time. This disposal completes a successful phased approach to realising that value which we can now deploy behind the group’s priorities."
GSK said proceeds of the divestment would be used for general corporate purposes.
Aspen stock fell 1.85% to close at R311.