GlaxoSmithKline UK (GSK UK) has dropped a scheme to increase its stake in GSK Consumer Nigeria, following opposition from minority shareholders.
The decision to abandon a scheme of arrangement that would have increased its indirect ownership in the unit to 75 percent is a fresh setback for Britain’s biggest drugmaker, which is battling a corruption scandal in China.
The company said on Monday it had agreed to consult shareholders and the Securities and Exchange Commission (SEC) about the proposal, including whether it should be implemented by way of a tender offer.
SEC is reported to have barred GSK UK from voting during court-ordered general meeting tomorrow (Tuesday) to consider its proposal to raise its stake from 46.4 per cent to 75 per cent in Glaxosmithkline Consumer Nigeria Plc.
SEC is also reported to have fixed the company’s share price for the possible tender offer at a minimum of N60 per share, compared with the N48 initially approved.
GSK UK had last November come up with the proposal to invest more in its Nigerian subsidiary but that investment would only come after increasing its holding to 75 per cent, which the board of GSK Nigeria accepted
Minority shareholders however opposed the move, saying it is a ploy to alienate them and delist the company from the Nigerian Stock Exchange in future just like the way Coca Cola Hellenic Bottling Company South Africa used its controlling stake in Nigerian Bottling Company Plc to delist the company last year.