Bankers thirsty for juicy GlaxoSmithKline drinks deal

It took just 18 minutes for GlaxoSmithKline to get the first call from an investment banker offering to help the drugmaker dispose of its famous Lucozade and Ribena drinks.

In fact, Britain's biggest drugmaker has not yet decided whether to sell either Lucozade or Ribena - but that did not stop bankers thirsty for a deal pitching in within minutes of news it was starting a "strategic review".

Their eagerness reflects a view that GSK has two very saleable brands on its hands, which together could fetch $1.2 billion or more, even if they no longer fit so well within the company's own portfolio.

"I'm surprised it took as long as 18 minutes," GSK Chief Executive Andrew Witty joked, adding there had a flood of calls after the review was announced in the group's results statement at 1200 GMT on Wednesday.

So far, GSK has not appointed any bankers to advise on the process.

The company plans to make a decision on the future of the energy and fruit drinks by the middle of this year and, for now, all options are being considered.

"No decisions have been taken or options ruled out - we could increase investments in certain parts of the world, find a partner or divest the products," Witty told reporters.

It is the last option that is attracting most attention, since Lucozade - launched in 1927 - and Ribena - introduced just 10 years later - are both highly successful, iconic consumer brands.

Although GSK does not break out detailed sales for the two products, they account for a sizeable chunk of the company's nutrition business, which had sales last year of 1.05 billion pounds.

The vast majority of Lucozade and Ribena is sold in Europe, where the two brands together bring in some 400 million pounds a year, according to industry observers, with Lucozade accounting for the lion's share.

Assuming potential buyers would be prepared to pay two times sales, that would point to a valuation of more than 800 million pounds for the two products, should GSK decide to sell.

For GSK, the challenge with Lucozade and Ribena is the lack of synergies with other parts of its operation. While Horlicks, another nutritional product, is very big in emerging markets - notably India - Lucozade and Ribena have yet to make the same leap and remain reliant on mature Western markets.

Ribena, in particular, is anchored firmly in its home market, both in terms of demand and supply. More than 90 percent of all the farmed blackcurrants in Britain and Ireland end up in the famous purple drink.