According to GSK Nigeria, it has received a non-binding offer from SBF for its drinks business comprising the bottling and distribution of Ribena and Lucozade and part of the Agbara manufacturing plant.
GSk noted that while its board is considering the offer and expects to make a decision after the appointment of its professional advisers and negotiation with SBF, any potential sale would be subject to shareholders and regulatory approvals, noting that until the sale is completed, the drinks business would belong to GSK Nigeria and “business as usual” would be maintained.
It would be recalled that the initial deal, which was awaiting final approval by European regulators, was expected to have been completed by the end of 2013.
Under the initial agreement, GSK wants to increase its holding in the Nigerian subsidiary to 80 per cent from the current 46.4 percent, in a bid to improve the company.
However, the price to exit became an issue as Nigerian shareholders insisted that the current price at the stock market should prevail, rather than the initial proposed price of N48 (18p) per share.
While there have been concerns on the inconclusiveness of the deal as a result of conflict of interest of the strategic partners and ability of GSK Nigeria to develop well-suited business streams that enamour drug-aggressive GSK UK and drink-biased SBF, the Chairman of GSK Nigeria, Chief Olusegun Osunkeye had explained that the Nigeria outfit will continue to bottle and distribute Lucozade and Ribena despite the global divestment of the brands from the parent group.
A statement obtained by the Guardian, explained that the board has granted SBF access to certain due diligence information.
“There can be no assurance that SBF will make a binding offer following completion of their due diligence review, or whether the terms of any such offer will be acceptable. We expect to be able to update shareholders further in due course. The financial terms of SBFs non-binding offer remain confidential.
“Any potential sale would be subject to shareholder and regulatory approvals and until it completes, the Drinks business belongs to GSK Nigeria and “business as usual” would be maintained with no change to the terms of employees working on the Drinks business and no change to the commercial arrangements of customers.
“If the transaction is agreed and the shareholders and regulators were to approve the sale, the retained GSK Consumer Healthcare Nigeria business would comprise Wellness, Oral healthcare, Nutrition and Pharmaceutical/Vaccines businesses, and would remain listed on the Nigerian Stock Exchange (NSE)”, the statement read in part.
On his part, Legal Director and Company Secretary, GSK Consumer Nigeria Plc, Uche Uwechia said: “The board of GSK has a duty to consider the non-binding offer and ensure that stakeholders are informed and engaged. We operate in a very challenging environment and it is the company’s responsibility to consider all options to increase shareholder value.”
By: Femi Adekoya.
Review: Emerging Market Formulations & Research Unit, Flagship Records.
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