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Shares in GSK fell by similar levels to the bottom of the FTSE 100 after the Dove and Lifebuoy soaps maker late on Wednesday effectively ended its pursuit of a business that the pharmaceuticals company plans to spin off later this year.
GSK said on Saturday it had rejected three approaches from Unilever for the business which makes Sensodyne toothpaste and painkillers such as Panadol and is 32% owned by U.S. drugmaker Pfizer (NYSE:PFE).
The final proposal made on Dec. 20 comprised 41.7 billion pounds in cash and 8.3 billion pounds in Unilever shares, but GSK said it failed to reflect the intrinsic value of the business and its potential.
Unilever’s decision not to increase its bid raises questions about its strategy under Chief Executive Officer Alan Jope.
The company defended the approach on Monday, calling the GSK business a good strategic fit as it tries to shift more towards a focus on health, beauty and hygiene products.
But Unilever’s shares tumbled following the approach and ratings agencies warned of debt downgrades as a result of such a big deal.
($1 = 0.7341 pounds)
