GlaxoSmithKline will come out with an open offer to buy additional 31.8 per cent stake at a price of Rs 3,900 a share.
The open offer is at a premium of about 28 per cent to GlaxoSmithKline Consumer Healthcare's (GSKCH) closing share price on the NSE last Friday, the company said.
The offer price is 28.15 per cent higher than Friday's closing price of Rs 3,043.2 a share on BSE. GlaxoSmithKline is likely to launch the offer in January next year.
Markets cheered the announcement as GSKCH shares soared 20 per cent to Rs 3,651.80 on BSE.
"GlaxoSmithKline has announced a voluntary open offer to increase its stake in its publicly-listed consumer healthcare subsidiary in India (GlaxoSmithKline Consumer Healthcare), from 43.2 per cent to up to 75 per cent at a price of Rs 3,900 per share," the company said in a statement.
The potential total value of the transaction at the offer price is approximately Rs 5,220 crore, it added.
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The offer made pursuant to the rules of the Securities and Exchange Board of India, is to acquire up to 13,389,410 shares, representing 31.8 per cent of the total outstanding shares of the Indian company, it added.
GSK Chief Strategy Officer David Redfern said: "This transaction represents a further step in GSK's strategy to invest in the world's fastest growing markets and, we believe, it offers a liquidity opportunity at an attractive premium for existing shareholders."
The transaction, which will be funded through GSK's existing cash resources, will be earnings neutral for the first year and accretive thereafter and will not impact expectations for the group's long-term share buyback programme, the company said.
As on quarter ended September 2012, the foreign promoter holding of GSKCH is 43.2 per cent, while the public shareholding is at 56.84 per cent.