Haleon Share Price Fell 2.22% on the $1.1 Billion GSK Stake Sale

The HALEON PLC (LON: HLN) share price fell 2.22% after GSK announced that it had sold about a quarter of its stake in the consumer healthcare company for a total of £886 million ($1.1 billion). GSK sold 270 million shares at a discounted price of 328 pence each.

The move is part of GSK’s strategy to use its stake in Haleon as a financial investment, using proceeds raised from the sale of its stake or from dividend payouts to strengthen its balance sheet and help support its goal of improving its drug pipeline. 

Investors' slightly adverse reaction to the announcement was driven by the discount offered to the investors who bought the Haleon shares from GSK. The shares were sold via an accelerated offering, which typically uses discounts to get investors to buy the shares on offer. 

GSK now has a 7.4% stake in Haleon, which will likely keep selling off as it looks to raise funding for its projects. Haleon shares have done well since their IPO in July 2022 and have been up 9% since then. Haleon was initially formed by combining GSK’s and Pfizer Inc.’s consumer health divisions.

The decision to spin off Haleon was arrived at by GSK due to the need to focus more on its pharma and vaccines business under the able leadership of its CEO, Emma Walmsley. GSK is keen to expand its drug pipeline and recently reported success via a vaccine for RSV, a dangerous common virus. 

Haleon’s spin-off from GSK was also fueled by pressure from activist investment firm Elliott Investment Management. The latest Haleon stake sale comes barely six months since GSK sold Haleon shares worth £804 million ($978 million). 

Pfizer is another leading pharma company with a significant stake in Haleon. It has also indicated its desire to sell its stake in the consumer health company over time. 

Bruno Monteyne, an analyst at Bernstein, said: “Investors would likely prefer a bigger placement than this 2.9% by GSK. If a decent sized placement of about 10% was done (i.e. Pfizer starting to sell), then investors can properly judge the appetite for this stock and start seeing an end to this tunnel.”

Haleon share price. 

The Haleon share price fell 2.22% to trade at 329.6p from Thursday’s closing price of 337.1p.