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How will GSK shareholders get their Haleon stock? GlaxoSmithKline spin-off trading as HLN

By Jenny McCall


Updated

A image of the GlaxoSmithKline offices.
Current GSK shareholders will not have to do anything to get their Haleon stock - Photo: Getty Images

UK biotech firm GlaxoSmithKline (GSK) has officially demerged from its consumer healthcare business and a new company called Haleon (HLN) was listed on the London Stock Exchange (LSE) on Monday 18 July. 

GSK second-quarter earnings were released on Wednesday and showed that revenue in the second quarter increased by 13% to £6.9bn ($8.3bn), reflecting growth across all segments but particular strength in specialty medicines. Operating profits were up 22% to £2.0bn, which excluded a one-off, non-cash £699m charge related to Pfizer investments and ViiV Healthcare. 

GSK also announced a 16.25p dividend, versus its second-quarter dividend payment in 2021, which was 23.75p. GSK raised its full-year guidance, stating they are "confident in delivering the long-term growth outlooks we set out for shareholders last year."

GlaxoSmithKline (GSKl) share price chart

GSK shareholders voted unanimously on Wednesday 6 July to go-ahead with the demerger of its consumer healthcare business, which will see the creation of a new business called Haleon. 

Haleon, which is expected to be a “world-leader” in consumer healthcare, is also offering the prospect of attractive organic sales growth, operating margin expansion and consistent high cash generation. 

Products that will be included within Haleon’s portfolio are leading brands, including Sensodyne, Voltaren, Panadol and Centrum. 

Citi (C), who are the official brokers for Haleon (HLN) issued the consumer healthcare business with a 'buy' rating and 360p price target on Thursday.

“We see the company as the best vehicle to play the secular attractions of Consumer Health, facilitated by Haleon’s scale and its exposure to staples segments where it can more easily outperform,” Citi analysts wrote in a note. 

“Coupled with a strategic optionality offering a floor to valuation, we believe the stock offers the best of both worlds: Consumer Health ‘defendability’ and staples ability to outgrow,” Citi analysts continued. 

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Haleon (HLN) debt

Meanwhile, a report in This is Money has stated that analysts at Barclays have calcualted that the new company, Haleon will be burdened with £10bn ($12bn) worth of debt once the demerger is complete. 

The GSK share price risen 9% this year and once the demerger has taken place, GSK will focus on biopharmaceuticals, which will include the development of vaccines and speciality medicines.

GSK is due to announce its second-quarter results on 27 July and will be treating Haleon as a discontinued operation.

In January, GSK rejected a £50bn bid for its consumer division by Unilever (ULVR).  It was reported in the Financial  Times, that CEO of GSK, Emma Walmsley said the vote by its shareholders to go through with the demerger only helped vidicate GSK's decision to reject the Unilever (ULVR) bid. 

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“The number one thing on investors’ minds is GlaxoSmithKline’s demerger. Unilever’s unexpected bid for the consumer healthcare business drew attention to its potential. Investors will be hungry for more data to determine whether it will live up to expectations once it’s flying solo,” Laura Hoy, Equity Analyst at Hargraves and Lansdown wrote in a note.

Unilever (ULVR) share price

 

How will shareholders get their shares in Haleon?

Within the GSK Circular, it states that if you are a qualifying shareholder, you will be entitled to receive: one Haleon share for each GSK share you hold at the shareholder record time.

The GSK circular states: “If you are a Qualifying Shareholder, you will not need to take any further action after completion of the Demerger and Separation. You may, however, need to provide your bank or building society account details to receive any fractional entitlement arising from the GSK Share Consolidation.”

If you are an American depositary shares (ADS) holder, you will be entitled to receive: one Haleon ADS for each GSK ADS you hold at the ADS holder record time.

Following completion of the demerger and separation, all shareholders will continue to own their existing GSK shares and all ADS holders will continue to own their existing GSK ADSs, in each case, unless they: sell or otherwise dispose of them. 

When will shareholders receive their Haleon shares?

It is expected that the demerger and separation will be completed, admission will become effective and dealings in Haleon shares will commence on the London Stock Exchange's (LSE) main market for listed securities by no later than 8am on Monday 18 July 2022. This is when all shareholders will receive their Haleon shares.

In what quantity will these shares appear in accounts of GSK shareholders?

Haleon will apply for its shares to be enabled in CREST with effect immediately upon admission. It is expected that CREST accounts for qualifying shareholders will be credited in respect of Haleon shares in uncertificated form shortly after admission on Monday 18 July 2022.

Please note that if a Shareholder holds only one existing GSK share then, because of the GSK share consolidation, such shareholder will not receive a new GSK share and will no longer be a shareholder.

“However, such Shareholders will receive a payment representing their fractional entitlement to a New GSK Share (and will have received one Haleon Share and therefore remain a Haleon Shareholder). Proceeds are expected to be paid to Shareholders electronically utilising existing dividend bank mandates or by crediting individual CREST accounts in the week commencing Monday 1 August 2022,” the GSK circular stated.

 

Markets in this article

GSKl
GSK
15.245 USD
-0.115 -0.750%
ULVR
Unilever - GBP
45.350 USD
-0.21 -0.470%
C
Citigroup
65.24 USD
0.32 +0.490%

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