European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<ul>
<li>GSK has rejected Unilever's approaches (last at £50 billion) but leaked it would be ready to accept an offer around £60 billion (a whopping c. 65% of Unilever's market capitalisation).</li>
<li>The deal would be transformational and Unilever's management see it as the way forward to revive the company's performance and the share price.</li>
<li>
Ballsy, but doable, with a positive impact on results from FY2024, but negative impact on leverage at 4.9x. I believe that Unilever may make a further approach.</li>
</ul>


GSK has rejected Unilever's approaches (last at £50 billion) but leaked it would be ready to accept an offer around £60 billion (a whopping c. 65% of Unilever's market capitalisation).
The deal would be transformational and Unilever's management see it as the way forward to revive the company's performance and the share price.

Ballsy, but doable, with a positive impact on results from FY2024, but negative impact on leverage at 4.9x. I believe that Unilever may make a further approach.


Unilever/GSK Heathcare: Ballsy, but Doable

Global Special Situations & Strategy, SR Services Ltd

David Lepper

Global Special Situations & Strategy

SR Services Ltd

SR Services provides Strategic Knowledge and Solutions services for Family Offices and Corporate Business. 

We deliver this via advisory services, strategic planning, opportunity analysis/sourcing, as well as solution implementation. 

Whilst, we create intellectual discipline and operational leverage for your projects or daily activities, our ultimate objective is to empower whilst enhancing your decision making. 

Strategic Knowledge and Solutions

Another activist letter: Bluebell Capital Partners (Bluebell) published an open letter to GSK last week (22nd September 2021). In it, Bluebell effectively echoed the stance taken by Elliott, with a stronger view towards Dame Emma Walmsley and her potential role as the New GSK CEO. Whilst we see the merit in this, as we later discuss, the overall situation is not as clear cut. Why more may follow: GSK has been silent and failed to release information in a timely manner and as promised. The inertness by GSK is reflected in the share price performance since 23rd June 2021. Shareholders need to see tangible evidence that matters are being dealt with. We outline why we believe this is likely in the coming quarter, which should allow for the value discount to be further illuminated.Event-driven value play: We believe that once the market focuses on the sum of the parts of “New GSK” and “Consumer Healthcare” and understands who is to lead the next era of GSK, then the gap to our fair value target should begin to close.

Another activist letter: Bluebell Capital Partners (Bluebell) published an open letter to GSK last week (22nd September 2021). In it, Bluebell effectively echoed the stance taken by Elliott, with a stronger view towards Dame Emma Walmsley and her potential role as the New GSK CEO. Whilst we see the merit in this, as we later discuss, the overall situation is not as clear cut. Why more may follow: GSK has been silent and failed to release information in a timely manner and as promised. The inertness by GSK is reflected in the share price performance since 23rd June 2021. Shareholders need to see tangible evidence that matters are being dealt with. We outline why we believe this is likely in the coming quarter, which should allow for the value discount to be further illuminated.Event-driven value play: We believe that once the market focuses on the sum of the parts of “New GSK” and “Consumer Healthcare” and understands who is to lead the next era of GSK, then the gap to our fair value target should begin to close.

GSK (GSK.L/​​​​GSK.N):  Bluebell Capital Partners Aligns with Elliott

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

Wisdomtree Japan Hedged Eq / Technical Analysis

Market dynamics continue to send mixed signals, but the bottom line is that not one MSCI ACWI Sector is breaking down, and important price support levels are holding in the US, Europe, and Japan. Additionally, the MSCI ACWI, ACWI ex-US, and EAFE indexes all remain above critical support levels. Until supports start to break we cannot be bearish. It is also worth noting that various indicators could be making a turn for the better, including early signs of interest rates bottoming in the US and Germany, a potential false breakdown in crude oil, and high yield spreads leveling-out.

Market dynamics continue to send mixed signals, but the bottom line is that not one MSCI ACWI Sector is breaking down, and important price support levels are holding in the US, Europe, and Japan. Additionally, the MSCI ACWI, ACWI ex-US, and EAFE indexes all remain above critical support levels. Until supports start to break we cannot be bearish. It is also worth noting that various indicators could be making a turn for the better, including early signs of interest rates bottoming in the US and Germany, a potential false breakdown in crude oil, and high yield spreads leveling-out.

Critical Supports Holding in the US, Europe, & Japan; Buying Health Care, Utilities, Materials, Tech

<ul>
<li>It is three weeks since Elliott’s 1st of July 2021 public letter to GSK and a month on from the 23rd of June briefing on the “New GSK”. The share price remains largely static and in line with the FTSE all-share index. </li>
<li>The Second Quarter results are due to be released on the 28th of July 2021 which should allow GSK another opportunity to address the issues raised as a result of Elliott’s campaign and potentially placate the activists and in particular their concerns around GSK’s de-merger plans.</li>
<li>We examine the state of play for GSK and Elliott and discuss several key questions. <ul>
<li>Is this could be the Calm before the storm?  </li>
<li>What are the core areas of the Elliott campaign?</li>
<li>What does GSK's report card look like, post-Elliott's public letter?</li>
<li>Is the announcement of the Consumer Healthcare CEO the right move?</li>
<li>What questions should be asked by investors?</li>
<li>What should we expect next?</li>
</ul>
</li>
</ul>


It is three weeks since Elliott’s 1st of July 2021 public letter to GSK and a month on from the 23rd of June briefing on the “New GSK”. The share price remains largely static and in line with the FTSE all-share index. 
The Second Quarter results are due to be released on the 28th of July 2021 which should allow GSK another opportunity to address the issues raised as a result of Elliott’s campaign and potentially placate the activists and in particular their concerns around GSK’s de-merger plans.
We examine the state of play for GSK and Elliott and discuss several key questions. 
Is this could be the Calm before the storm?  
What are the core areas of the Elliott campaign?
What does GSK's report card look like, post-Elliott's public letter?
Is the announcement of the Consumer Healthcare CEO the right move?
What questions should be asked by investors?
What should we expect next?




GSK (GSK.L/​​​GSK.N): Revisiting Elliott’s Letter and What Remains Unanswered

The Hang Seng, EURO STOXX 50, MSCI ACWI ex-US, and MSCI EAFE display bearish short-term inflections. Additionally, 10-year yields in the US and Germany are breaking down below key support. These deteriorating market dynamics raise concerns of a deeper pullback, however other indicators remain largely positive. As a result, we continue to see a mixed, but overall constructive market. Actionable themes highlighted in today's report include Health Care and Real Estate.

The Hang Seng, EURO STOXX 50, MSCI ACWI ex-US, and MSCI EAFE display bearish short-term inflections. Additionally, 10-year yields in the US and Germany are breaking down below key support. These deteriorating market dynamics raise concerns of a deeper pullback, however other indicators remain largely positive. As a result, we continue to see a mixed, but overall constructive market. Actionable themes highlighted in today's report include Health Care and Real Estate.

Global Equity Strategy: Mixed Market Environment Continues As Yields Break Down

United Kingdom

GlaxoSmithKline PLC operates as a research-based pharmaceutical company. The Company develops, manufactures, and markets vaccines, prescription, and over-the-counter medicines, as well as health-related consumer products. GlaxoSmithKline provides products for infections, depression, skin conditions, asthma, heart and circulatory disease, and cancer.

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GlaxoSmithKline PLC (GSK LN)

Unilever/GSK Heathcare: Ballsy, but Doable

I believe that a new £60 billion attempt by Unilever is not to be ruled out completely. It is a high price tag, but Unilever could finance the deal.

Jesus Rodriguez Aguilar

GSK (GSK.L/GSK.N): Bluebell Capital Partners Aligns with Elliott

Another activist letter is no real surprise. GSK has failed to release pertinent information on the Consumer Healthcare spinoff & “New GSK”; As...

David Lepper

Critical Supports Holding in the US, Europe, & Japan; Buying Health Care, Utilities, Materials, Tech

Various indicators are making a turn for the better, including early signs of interest rates bottoming in the US and Germany, a false breakdown in...

Vermilion Research

GSK (GSK.L/GSK.N): Revisiting Elliott’s Letter and What Remains Unanswered

It is 3 weeks since Elliott’s 1 July public letter to @GSK and a month on from the 23rd June briefing from GSK on “New GSK”. Our latest Report asks...

David Lepper

Global Equity Strategy: Mixed Market Environment Continues As Yields Break Down

The Hang Seng, EURO STOXX 50, MSCI ACWI ex-US, and MSCI EAFE display bearish short-term inflections and 10-year yields in the US and Germany are...

Vermilion Research

Price Gauge

52-week Range

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Dividend (Yield)

Unilever/GSK Heathcare: Ballsy, but Doable

I believe that a new £60 billion attempt by Unilever is not to be ruled out completely. It is a high price tag, but Unilever could finance the deal.

Jesus Rodriguez Aguilar

GSK (GSK.L/​​​​GSK.N): Bluebell Capital Partners Aligns with Elliott

Another activist letter is no real surprise. GSK has failed to release pertinent information on the Consumer Healthcare spinoff & “New GSK”; As...

David Lepper

Critical Supports Holding in the US, Europe, & Japan; Buying Health Care, Utilities, Materials, Tech

Various indicators are making a turn for the better, including early signs of interest rates bottoming in the US and Germany, a false breakdown in...

Vermilion Research

GSK (GSK.L/​​​GSK.N): Revisiting Elliott’s Letter and What Remains Unanswered

It is 3 weeks since Elliott’s 1 July public letter to @GSK and a month on from the 23rd June briefing from GSK on “New GSK”. Our latest Report asks...

David Lepper

Global Equity Strategy: Mixed Market Environment Continues As Yields Break Down

The Hang Seng, EURO STOXX 50, MSCI ACWI ex-US, and MSCI EAFE display bearish short-term inflections and 10-year yields in the US and Germany are...

Vermilion Research

GSK (GSK.L/GSK.N): Bluebell Capital Partners Aligns with Elliott

GSK (GSK.L/GSK.N): Revisiting Elliott’s Letter and What Remains Unanswered