PHARMACEUTICAL behemoth Pfizer has lost the last bidder for the sale of its OTC business, which includes Advil, Centrum and Chapstick ranges, with GSK announcing it is pulling from the auction field.
Reckitt Benckiser and GSK were the only remaining companies expressing interest in Pfizer's OTC business sell-off earlier this year (PD 05 Feb 18) and when RB dropped the opportunity, GSK was in pole position, but on Friday that all changed.
According to a report in the Financial Times, GSK's ceo Emma Walmsley explained that while the group continued to "review opportunities that may accelerate our strategy, they must meet our criteria for returns and not compromise our priorities for capital allocation".
On Fri, GSK share values jumped 4.6% on the news, highlighting shareholder doubt about the value proposition, a sentiment that had reportedly been expressed by investors to the executive.
The purchase, valued at $20b, would have broadened GSK's OTC range significantly and "brought healthy cash flows", but with Novartis owning 36.5% of Pfizer's OTC business, the acquisition would also have diluted GSK's ownership across the total, which may have been a factor in investor reaction, some analysts have speculated.
At this stage, Pfizer's consumer healthcare business remains in limbo with no apparent remaining bidders, forcing the company to say it "continues to evaluate potential strategic alternatives".
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