Reckitt Benckiser Group PLC has launched a plan to spin off its pharmaceutical division and list it on the London Stock Exchange as a stand-alone company under the name of Indivior Plc.
Investors will get one share in the new demerged company for every share they own in RB. The spin-off, if approved by shareholders at general meeting on December 11, is expected to be completed and shares to start trading on the LSE on December 23.
The demerger is a part of RBs plan to focus on consumers health and hygiene products, such as Clearasil, Veet and Nurufen.
Valuations of the new company have ranged from £1.1 billion to more than £4 billion, but the latest analysts projections estimated around £2.2 billion. The value of the company will be highly affected by the number of shareholders who decide to keep the stock.
However, that may prove challenging as the division reported a Q3 decline in revenue due to the loss of patent protection on its opioid addiction treatment, Suboxone, its best selling drug. Analysts have projected a revenue for the division to fall 12.5% to £680 million, operating profit is predicted to drop almost 20% to £345 million.
Shaun Thaxter, who will continue to run the business, said he was confident in the companys growth in the long term, as demand is on the rise, driven by the global shift to threat drug addiction as chronic disease rather than something to be punished.
“I look forward to partnering with the Indivior Executive Committee and Board to further build upon the strong foundation set by Reckitt Benckiser Pharmaceuticals under the guidance of RB as we transition to a sustainable, stand-alone organisation” he added.
Mr. Thaxter said that Indivior, a combination of the words “individual” and “endeavour” to mirror the difficulties of beating addiction, would not diversify its drug portfolio and remain focused on specialist anti-addiction medicines.
Reckitt Benckiser Group PLC lost 0.56% on Friday and closed at GBX 5 325 in London. On Monday the stock dropped 0.52% to trade at GBX 5 297.5 at 13:57 GMT, marking a one-year increase of 9.95%. According to the Financial Times, the 19 analysts offering 12-month price targets for Reckitt Benckiser Group PLC have a median target of GBX 5 450, with a high estimate of GBX 6 040 and a low estimate of GBX 4 500. The median estimate represents a 2.35% increase from the last close price of GBX 5 325.