Elliott also believes a sale would pique the interest of GSK rivals such as Reckitt Benckiser, Procter & Gamble, and Johnson & Johnson.
The hedge fund, founded by 76-year-old Paul Singer, is exploring opportunities after building a multi-billion pound stake in GSK, the highest rated company on the FTSE 100. It made its most public assault on Dame Emma’s leadership and said, GSK has had “poor execution and value creation” and “long-term operational and share price underperformance.”
GSK hit back with claims that Elliott’s criticism was “not new” and was addressed by Dame Emma’s strategy.
But in a letter to GSK chairman Jonathan Symonds, Elliott wrote: âThe GSK board should remain open to the possibility of deviating from its baseline [to list the business]. Any strategic opportunity for the sale of Consumer Healthcare should be carefully pursued.
âIf such opportunities arise in the next few months, we urge the board to evaluate them impartially against the standard spin and sell plan.
âAs an independent company, Consumer Health will be able to set its own investment and capital allocation agenda and position the company to benefit from potential industry consolidation
âThis means that Consumer Healthcare can grow faster, invest better, increase efficiency and thereby offer better products to more customers. This dynamic makes Consumer Healthcare a highly attractive company, both as a stand-alone investment and as a potential strategic goal for other players in the industry. ”
Elliott also called for a boardroom overhaul to include directors with more experience in both the pharmaceutical and consumer goods industries in preparation for the split. Elliot thought it was close to insisting that Dame Emma leave GSK when it was disbanded, but it has signaled that she should be asked to compete with competing candidates for the CEO of the new pharmaceutical-only business.
GSK said: âThe legacy items that Elliott identifies in his letter are not new. They have all been identified by GSK since 2017. The transformation program was designed to address all of these legacies and more.
âWe put an ambitious plan in place on June 23rd to see a leap in performance over the next decade and create significant value for GSK shareholders. We believe our shareholders support this strategy and focus on GSK executing it without distraction or delay. That is our clear priority. “