Prime Highlights:
Pfizer to sell $3.05 billion worth of shares in Haleon, reducing its stake to 7.3%.
The sale includes 700 million shares at 357 pence each, a 2.8% discount.
Pfizer remains Haleon’s largest shareholder after the sale.
Key Background:
Pfizer (PFE.N) has announced its decision to sell a $3.05 billion stake in Haleon (HLN.L), reducing its ownership in the British consumer healthcare firm to approximately 7.3% from the previous 15%. The sale, comprising 700 million shares priced at 357 pence each, is being conducted at a discount of 2.8% from Haleon’s closing price on January 14. JPMorgan, the bookrunner for the transaction, confirmed the details of the sale on January 15.
Haleon, known for its well-established brands like Sensodyne, Panadol, and Advil, has seen its stock perform well, gaining 17% in value over the past year. On the day of the announcement, Haleon’s shares rose 0.7% to 369.7 pence, aligning with the broader FTSE 100 index.
This divestiture involves nearly 7.7% of Haleon’s issued share capital. The company was formed in 2019 through a merger of Pfizer’s and GSK’s (GSK.L) consumer healthcare divisions and was later spun off from GSK in 2022. Following this sale, Pfizer will remain Haleon’s largest shareholder. However, the U.S. pharmaceutical giant has already outlined its plan to reduce its stake in a gradual and strategic manner, with further sales anticipated in the coming months.
The divestment aligns with Pfizer’s broader corporate strategy, especially as the company faces increased pressure from Starboard Value, a hedge fund pushing for improved management accountability due to underperformance in certain areas. Notably, Pfizer had already divested a $3.3 billion stake in Haleon last October, while GSK had completely exited its investment earlier in 2023.
Haleon’s third-quarter results in 2024 were impacted by a stronger pound and lower-than-expected sales of Panadol in regions such as Australia and the Middle East, falling short of analysts’ projections. Despite these challenges, the company’s strong portfolio continues to drive investor confidence in its long-term prospects. JPMorgan and Morgan Stanley are acting as joint global coordinators and bookrunners for the transaction, which is expected to further shape Haleon’s financial landscape.