18 July 2022
If you are covering Haleon’s first day of trading, please find below a comment from Chris Beckett, head of equity research at Quilter Cheviot:
“Haleon’s opening day trading is certainly at the lower end of where expectations were coalescing, however, this is not necessarily a bad thing. The fact it is a little lower than expected means there is scope for investors to build a meaningful position and potentially capture some upside.
“Fundamentally, this is an attractive industry and business to have exposure to given its defensive characteristics at a time where volatility is upsetting markets. The business itself has strong brands and market positions in oral health, pain relief, digestive health, vitamins and respiratory health and there is no reason to think these cannot be maintained.
“The opening day price does come in about £8bn lower than Unilever’s £50bn bid earlier this year and this will ultimately be the benchmark for Haleon. Clearly the market is lower since then, however, it will be for Haleon’s management to justify why they rejected the approach.
“Furthermore, investors must be reminded this is not a complete free float, instead just over half of the shares are on offer to buy just now. This will impact the share price going forward and depending when GSK and Pfizer decide to cash in.”
