GSK leads FTSE 100 higher after rejecting Unilever offer for consumer arm

Healthcare firm GlaxoSmithKline led London's FTSE 100 higher on Monday after rejecting a 50-billion-pound buyout offer for its consumer arm from Unilever, while energy and mining stocks also provided support.


Reuters | London | Updated: 17-01-2022 14:56 IST | Created: 17-01-2022 14:50 IST
GSK leads FTSE 100 higher after rejecting Unilever offer for consumer arm
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Healthcare firm GlaxoSmithKline led London's FTSE 100 higher on Monday after rejecting a 50-billion-pound buyout offer for its consumer arm from Unilever, while energy and mining stocks also provided support. The blue-chip FTSE 100 index gained 0.7%, with miner Glencore and energy majors BP and Royal Dutch Shell among the biggest boosts to the index.

GlaxoSmithKline jumped 4.7% after it said over the weekend that it had rejected Unilever's offer for its consumer goods arm and would stick to its plan of spinning off the unit. Unilever shares dropped 6.6% and were the worst performer on the index. A report said the company was in talks with banks for additional financing to make a potential sweetened offer.

"Paying 50 billion pounds for a business that sells pain relief products and toothpastes comes across as a risky bet and while there appears to be universal consensus that Unilever needs to shake up its business ... the price tag for doing so seems a little on the rich side," CMC Markets analyst Michael Hewson said. Analysts at Barclays said that Unilever's offer and the ensuing valuations are very complex to execute in normal times, let alone in the middle of a global pandemic.

The domestically focussed mid-cap index rose 0.4%. Homebuilders gained 0.5% after a survey showed asking prices for British homes rose by the most in annual terms in nearly six years in early 2022.

Taylor Wimpey Plc, the UK's third-largest housebuilder, added 2.4% after saying it expected annual results in line with its forecasts. Meanwhile, Clinigen Group Plc dropped 0.9% after agreeing to a sweetened takeover offer by UK-based private equity firm Triton that valued the pharmaceutical services firm at about 1.3 billion pounds ($1.78 billion).

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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