STOCKS TO WATCH: How will New GlaxoSmithKline invest its £8bn war chest?
Investors will learn this week how GlaxoSmithKline plans to split its pharma and vaccines arm, dubbed New GSK, from its Advil-to-Sensodyne consumer division.
Shore Capital analyst Adam Barker says the big question is ‘whether New GSK needs to be beefed up to stand on its own two feet’.
The company, which has been strengthening its cancer business, should have the firepower for deals – the spin-off will land it an £8billion dividend and reduce debts.
Decision time: Concerns linger that New GSK will have to overpay for promising assets in a buoyant market
But concerns linger that New GSK will have to overpay for promising assets in a buoyant market.
At the investor summit, GSK chairman Sir Jonathan Symonds is expected to cite his experiences in splitting HSBC’s investment and retail banks in 2018 to calm any nerves.
Meanwhile, anticipated new board hires are unlikely to be announced this week.
With activists Elliott and Bluebell baying for change, Symonds will need to make sure shareholders are convinced.
Morses in good shape
Morses Club should put a more positive investment case for the troubled doorstep lending sector this week as it issues interim results.
The Mail on Sunday revealed in May that rival Provident Financial was pulling out of doorstep loans after 140 years.
But analysts reckon Morses is in good shape, with an ongoing restructure and rebrand likely to support digital growth.
Go-Ahead derailment blow to widow of group’s founder
Go-Ahead shares were derailed last week after the Southeastern trains operator was found to have hidden £25million of profits from the Treasury.
The Government’s ‘operator of last resort’ will run its Kent to London commuter network from next week.
The fiasco was a blow to Diana Ballinger, widow of the group’s founder Martin and still a top shareholder.
Martin Ballinger built the group in the 1980s before floating it in 1994. The pair dedicated themselves to philanthropy in the North-East before his death in 2007.
Diana, who has continued that work, saw the value of her holding, and that of the family charitable trust, shrink by a combined £6million as the stock thundered into the sidings. Unfortunate.
Zegona to return £335m to investors
London-listed Zegona will return £335million to investors this week in a tender offer for shares.
The payout comes after the European telecoms acquisition vehicle sold its Spanish business Euskaltel to rival MasMovil in a £1.7billion deal.
Zegona, led by ex-Virgin Media finance boss Eamonn O’Hare, will now begin raising £1billion of equity to go after the next deal. O’Hare tells me he has a ‘long list of 15’ targets, including UK firms, and hopes to land a purchase before Christmas.
‘The motherships of the industry in Europe, Deutsche Telekom, Vodafone, Telefonica, BT, have been slimming down,’ he says.
‘That puts us in a good position to come in and snap up these assets being sold off.’