Investing.com – GlaxoSmithKline ADRs (NYSE:GSK) traded 2.5% higher in Tuesday’s premarket after a newswire report suggesting the spin off of its consumer healthcare unit will unlock more value than thought.
Bloomberg reported that private equity groups eyeing the split reckon the unit could be worth up to $54 billion.
GSK is under pressure from activist investors such as Elliott Management to improve shareholder returns. According to its plans for the spin-off, the parent company should receive approximately $11.2 billion in dividends from the consumer unit when it is separated. GSK will keep up to 20% of the new consumer healthcare company as a short-term financial investment, which it intends to monetize later.
GSK expects to deliver sales growth of more than 5% and adjusted operating profit growth of over 10% over the next five years.