hit-toques.com

Sunday, January 16, 2022

United Kingdom-based pharmaceutical giant GlaxoSmithKline (GSK) confirmed January 15 it had rejected three “unsolicited, conditional and non-binding proposals” by Unilever to acquire its Consumer Healthcare division, including one bid of GBP50 billion in value made on December 20, believing Unilever “fundamentally undervalued” the business and its potential.

News that Unilever attempted to buy GSK Consumer Healthcare for 50 billion pounds, split between GBP41.7 billion in cash and 8.3 billion in Unilever shares, was first reported by The Sunday Times, and subsequently confirmed by both companies. Had the latest acquisition offer gone through, it would have been the largest deal since the beginning of the Covid-19 pandemic, and one of the biggest ever among companies listed on the London Stock Exchange.

A deal would likely mean integrating the GSK division into Unilever’s own beauty and personal care business, which has seen profit margins struggle under Covid-19 lockdowns and higher costs for plastics and petrochemicals.

A brief response on the Unilever website confirmed it “had approached GSK and Pfizer about a potential acquisition”, and adds GSK Consumer Healthcare “would be a strong strategic fit” as the company looks to rework its portfolio. GSK indicated the proposals were “carefully evaluated” by its board of directors, but unanimously rejected under the conclusion they “were not in the best interests of GSK shareholders” and “failed to reflect the intrinsic value of the business and its potential”.

The Sunday Times have indicated the latest deal did not include an acquisition premium or recognition of corporate synergies; the joint venture between GSK and healthcare firm Pfizer, which holds a minority stake in the company, was initially projected to generate GBP500 million in cost savings by this year and realise “substantial cost synergies”. The BBC’s business editor Simon Jack wrote that a standard takeover premium would be about 30%, but could be reduced over the GBP10 billion in debt GSK was predicted to “leave on the books”, of the GBP22 billion net debt GSK reported for Q3 2021.

The deals were assessed by the Board respective of a proposed demerger of GSK Consumer Health into a separate PLC in the middle of this year. Jack wrote GSK “always” had “an open mind to a trade sale to another party if the price was right.” Unilever did not take into account the standard takeover premium, the value of cost savings and Board confidence Consumer Health could deliver “superior organic sales growth” of between four and six per cent in the medium term. This was despite valuations of about GBP50 billion by Goldman Sachs and Barclays analysts, and a lower GBP45 billion valuation by Jeffries Group.

There are no current talks between Unilever and either Pfizer or GSK, and the Unilever statement reads: “There can be no certainty that any agreement will be reached.” Under CEO Alan Jope, Unilever has focused its investments and marketing on brands which “communicate a strong environmental or social purpose” by streamlining its holdings in items like beauty products and tea. Jope previously said Unilever would concentrate on smaller takeovers in industries like luxury beauty and wellness.

However, Russ Mould, investment director at AJ Bell, told the BBC this would be a “high risk deal” at a time investors are cautious about GSK’s performance, but also a time of rising inflation he says encourages “consumer goods with loyal customers”. Mould added despite strong cashflow, Unilever had recently missed targets on sales and profit margins, putting pressure on the CEO.

Pressure by activist shareholders Elliott Management Corporation and Bluebell Capital Partners have also mounted against GSK CEO Emma Walmsley over the unit’s failure to develop a Covid-19 vaccine and Walmsley’s own lack of scientific experience. GSK has been involved in the ongoing development of a Covid-19 vaccine with French biopharmaceutical company Sanofi, and announced preliminary results from Phase 3 trials last month.

In 2018, Unilever bought several consumer nutritional products from GSK, including its flagship product Horlicks, and merged its Indian subsidiary, Hindustan Unilever, with GSK Consumer Healthcare India.

Sunday, January 21, 2007

Ricky “The Hitman” Hatton regained the IBF light welterweight title belt he relinquished less than 12 months ago when he defeated Juan Urango in Las Vegas, Nevada tonight.

“The Hitman” won by unanimous decision, as the fight went to 12 rounds. Despite early match odds suggesting Hatton would dominate the fight, this was not the case. Each round was close, but most pundits and judges alike agreed that Urango only won 1 of the 12 rounds, with Hatton taking the other 11.

Despite the unfamiliar confines of Las Vegas, Hatton looked touched by the ringing of football fan-like chants, familiar in British boxing, that rang around the arena, as more than half of it was filled by traveling support from across the atlantic.

Many in the UK will hope Hatton has ended the “curse” that has seen names such as Frank Bruno, Naseem Hamed, Barry McGuigan and others fall short while headlining fights on “The Strip”.

From here, it is widely believed “The Hitman” will move on to fight Jose Luis Castillo in June, again likely in Vegas.

Friday, October 26, 2007

Leaked emails have revealed that the United Kingdom’s Royal Air Force (RAF) were aware of a dangerous problem with fuel leaking from Nimrod MR2 surveillance aircraft long before one exploded in midair during a mission in Kandahar, Afghanistan. All 14 people on board were killed in the crash in September last year.

Graham Knight, father of Sergeant Ben Knight, who died in the accident aged 25, told reporters that he had received internal RAF emails detailing prior concerns about the fuel leak problems on the Nimrod. One email originally sent on December 2, 2005 commented that “XV230 [the tail number of the Nimrod that would go on to crash] has fuel-leak issues which need to be rectified before the aircraft can be deployed.” Another, from February 2006, had the following to say: “The age of the airframe, combined with the aggressive tempo with which we are flying the jets in stark temperature shifts, is contributing to our leak headache.”

Another email later the same month highlighted the serious nature of the problem: “Fuel leaks on the Nimrod MR2 aircraft now pose a significant threat to the force being able to meet commitments and operational tasking.”

The emails were quietly forwarded to Knight, who has gone public with them via Sky News. “I have evidence that a fuel leak caused the crash and the Service was fully aware of the risk months beforehand. I believe the RAF killed my son,” he said.

He said that the emails were all written by senior members of the RAF, adding “there are so many people within the organisation who are not happy with what has been going on.”

“The more I have dug, the deeper the conspiracy gets – essentially, I think the major failures have been down to communication problems.”

A board of inquiry has recently completed deliberating the cause of the accident, with a final report expected in about two weeks time. It is expected by many that the report will find a fuel leak was to blame. The crash was the largest loss of life from any UK service in a single incident since the Falklands war. Although the report will determine the cause of the crash and make recommendations to prevent it’s recurrence, it will not attempt to establish blame for the disaster.

The Ministry of Defence (MoD) had previously admitted they were experiencing Nimrod fuel leaks, saying in January that in the six months proceeding there had been no less than 25 fuel leaks in RAF Nimrod aircraft. Nimrods were grounded after the crash, but were subsequently phased back into operation, and are currently back in full service flying regular reconnaissance missions in Afghanistan.

The MoD’s response to these recent allegations was as follows: “RAF Nimrod aircraft are designed and certified to strict airworthiness and safety standards.

“If we didn’t have confidence in the aircraft, we would not continue to fly them.

“Nimrod has a good safety record and remains a potent and respected aircraft.

“The Board of Inquiry to establish the cause of the accident last September is continuing and it would be unhelpful to speculate on the outcome until the board’s findings are published.”

All 12 of the crewmembers on board were from 102 Squadron at RAF Kinloss, Scotland. The loss was so large as in to have an adverse affect on the air base. The other two personnel on board were a marine and a solider.

“An aircraft should not suddenly burst into a ball of flames in mid-air,” Knight commented. He has been conducting his own investigation based on documentation obtained under the Freedom of Information Act. One important document is a recommendation made by BAE Systems in 2004 following a safety audit that concluded that it would be impossible to extinguish a fire on a Nimrod. The recommendation was to install a fire detection system. It was never acted upon.

Sunday, January 21, 2007

Ricky “The Hitman” Hatton regained the IBF light welterweight title belt he relinquished less than 12 months ago when he defeated Juan Urango in Las Vegas, Nevada tonight.

“The Hitman” won by unanimous decision, as the fight went to 12 rounds. Despite early match odds suggesting Hatton would dominate the fight, this was not the case. Each round was close, but most pundits and judges alike agreed that Urango only won 1 of the 12 rounds, with Hatton taking the other 11.

Despite the unfamiliar confines of Las Vegas, Hatton looked touched by the ringing of football fan-like chants, familiar in British boxing, that rang around the arena, as more than half of it was filled by traveling support from across the atlantic.

Many in the UK will hope Hatton has ended the “curse” that has seen names such as Frank Bruno, Naseem Hamed, Barry McGuigan and others fall short while headlining fights on “The Strip”.

From here, it is widely believed “The Hitman” will move on to fight Jose Luis Castillo in June, again likely in Vegas.