Pharma giant GSK (aka GlaxoSmithKline) has abandoned plans for an IPO of its HIV medicines division, it said today.
In first quarter results published today, the company said its decision to hang on to ViiV Healthcare reflected an "updated strong positive outlook".
Analysts at Jefferies have said ViiV could be valued at as much as £17bn on the public market, meaning had the division been spun-off, it would have been one of the largest IPOs in the past decade (Although Glencore was valued at £38bn during its 2011 IPO).
GSK owns 80 per cent of ViiV - other shareholders include Pfizer and Japanese rival Shionogi.
After a difficult year in 2014 - it was forced to issue a profit warning in July thanks to falling sales, just as it was dragged into a bribery scandal in China - in February this year it appointed former RBS chairman Sir Philip Hampton to lead its board.
Today it will accelerate its cost savings programme, delivering total annual savings of £3bn by the end of 2017, and will pay shareholders an annual dividend of 80p each for the next three years.
That's down a bit from what it expected - but that, it said, is thanks to its asset swap with Novartis, under which it acquired its Swiss rival's global vaccines arm, while Novartis bought GSK's oncology business.
It was cautious over group revenue, suggesting its compound annual growth rate is likely to be in the "low-to-mid single digits" between 2016 and 2020. Sir Andrew Witty, GSK's chief executive, said:
We have done so recognising that our operating environment is shifting radically, particularly in relation to pricing and that we must be prepared for specific uncertainties, including the possible introduction of generic Advair in the US and the potential exercise of put options from partners in ViiV Healthcare and our consumer healthcare business.
Shares in GSK rose sharply at midday, when the statement came out. By early afternoon, they were trading one per cent up at 1,515p.