Gsk Share Discussion Threads

[jonjoneil] 23/6/2022 14:14

Can't imagine Pfizer doing this.

[gateside] 23/6/2022 14:12

I think pharmaceutical companies often feel they have a philanthropic obligation to help mankind.I do agree it should probably be voted upon. And if so I'm sure it would pass easily.

[jonjoneil] 23/6/2022 13:58

TM
I totally agree. It's not their money.
Charitable donations should be kept separate from investments.

[tradermichael] 23/6/2022 12:49

I would have thought that this should be subject to a shareholder vote:


GSK PLC said Thursday that it will invest 1 billion pounds ($1.23 billion) to accelerate research and development over the next 10 years, targeting infectious diseases that disproportionately affect lower-income countries.

The British pharmaceutical company, formerly known as GlaxoSmithKline, said the investment will focus on new and disruptive vaccines and medicines to prevent and treat malaria, tuberculosis, HIV, neglected tropical diseases and anti-microbial resistance. These account for more than 60% of the disease burden in lower-income countries, the company said.

To deliver against its targets, GSK has formed a dedicated, non-commercial global health unit, measuring success by its effects on health alone without the concern of a commercial return on investment. This includes global health research and development hubs, which are advancing more than 30 potential new vaccines and medicines, targeting 13 high-burden infectious diseases.

[tradermichael] 21/6/2022 13:55

Seems to be a 'fashion' trend right now to split large global businesses, but this one is very strange:

Kellogg's has announced it's spinning off its cereal business as it plans to separate into three independent companies. It plans to separate into three independent public companies, sectioning off its iconic brands into distinct snacking, cereal and plant-based businesses.

The US food giant, which owns brands including Corn Flakes and Coco Pops, said the break-up will give each business a better chance to grow.

Steve Cahillane, chief executive of Kellogg, said: "These businesses all have significant standalone potential, and an enhanced focus will enable them to better direct their resources toward their distinct strategic priorities."

[tradermichael] 21/6/2022 13:50

It is, GSK intends to monetise its holding in Haleon in a disciplined manner to further strengthen the Company’s balance sheet.

[jonjoneil] 21/6/2022 13:33

Thanks TM.
I wonder why Glaxo couldn't have divested consumer in the same way?

[tradermichael] 21/6/2022 12:52

Prior to the Demerger, GlaxoSmithKline Consumer Healthcare Holdings (No. 2) Limited (“JVCo”), the current holding company of the Consumer Healthcare business, will pay dividends to GSK and Pfizer.

32 per cent. of HAL total ordinary ordinary share capital will be held by Pfizer. In keeping with Pfizer’s transformation into a more focused, global leader in science-based innovative medicines and vaccines, Pfizer intends to exit its 32 per cent. ownership interest in Haleon in a disciplined manner, with the objective of maximising value for Pfizer shareholders.

[jonjoneil] 21/6/2022 10:07

How are Pfizer handling their part of the split?

[anhar] 21/6/2022 10:00

Consolidations are common, usually accompanying a substantial cash return though in this case it's the demerger. In effect they compel the sale of part of your holding. You end up with fewer shares in the original company but in return some cash, or in this case Haleon shares.

Their purpose is to try and maintain approx the same share price before and after the consol for cosmetic purposes because a big price drop doesn't look too attractive. It's rather craven of the companies and I find them something of a nuisance though I do welcome cash returns and demergers.

Note that consols are not essential in these situations. For instance BHP recently distributed WDS shares with a seriously large sum involved, but did not bend to the consol fashion that most companies would in this situation. Good for them I think.

[tradermichael] 21/6/2022 09:53

Not in ISAs, liable for CGT!

[lippy4] 21/6/2022 09:27

if they are all held in a isa no problems...

[tradermichael] 21/6/2022 09:25

Yes, but its more complex than that.

For example, if they are sold separately at different times ..... what cost new GSK, what cost Haleon?

[jonjoneil] 21/6/2022 09:01

ISAy ISAy ISAy. Don't have that problem.

Surely, if you sold both companies in the same tax year the base cost would be the same as if you sold them now. Any gain would be on the two companies added together.

[spyder] 21/6/2022 08:35

—> TM
I suspect that the calculation will be quite complex, but that the company will advise us once the transaction is completed?

[tradermichael] 21/6/2022 07:17

Question is:

If you held Company A and later sell new Company A and Company B and make a gain, what price do you apply to the Capital Gain calculation as the base cost of the shares for tax purposes?

[pierre oreilly] 20/6/2022 23:11

Co A worth £10

Splits off assets worth £2 into company B. Co A now worth £8

Co A consolidates 4 for 5

co A now worth £10 again, but you only hold 80% of the shares in A which you previously held. You also hold shares in co B worth £2.

[sajad37] 20/6/2022 20:25

Could you provide an example please

[patientcapital] 20/6/2022 16:48

That's correct.

[jonjoneil] 20/6/2022 16:32

The value of GSK shares will be reduced after Haleon is taken out. I think consolidation is the process of reducing the number of GSK shares to bring the value of each new share to approximate the price immediately before the split. So you will have less GSK plus Haleon (to equal the value of your pre-split holding).
So, in theory, if you sold your Haleon shares immediately after issue, and brought new GSK with the proceeds you would end up with the same number of GSK shares that you had pre-split

I'm prepared to be corrected.

[maxplus2] 20/6/2022 15:46

Received this Corporate Action regarding GSK. What do they mean by consolidation?Consolidation of GSK shares at a rate yet to be determined, effective 19th July 2022.

[tradermichael] 20/6/2022 11:49

Thanks anhar!

[alphorn] 20/6/2022 11:49

It will be interesting to see how the (country) source of the income streams and the point of dividend payments pans out.

[anhar] 20/6/2022 11:45

I have little interest in capital valuations and fluctuating market prices or "valuations" here. In this situation I just have a general expectation, based on lengthy experience, that over time it will benefit me, despite as I said, the initial combined income being a lot less than old GSK. I accept that it may not work out that way, that's the risk I take, but doing nothing, in my strat, is nearly always the best approach in the end.

[tradermichael] 20/6/2022 11:30

Ok, so if it happens that one is overvalued and the other is below your target level of return, you sell out the undervalued one? Surely 'Day 1' valuations will be a bit skew before the market settles them down?