Unilever faces £14bn hurdle to sweeten Glaxo bid

Martin Deboo at Jefferies said boosting the offer to a £55bn all-cash bid would lift the cost and debt for Unilever to a “prohibitive amount”. 

Unilever would be forced to either tap investors by raising £14bn or by borrowing and selling assets, most likely from its foods business, to fund an improved offer while keeping debt contained, he said. Jefferies said the initial bid had a “modest” premium.

“We would expect disclosure of Unilever’s approach to encourage other over-the-counter participants like P&G and Reckitt to reach for their slide rules, as well as perhaps Nestle,” Mr Deboo said. “Any auction would be a test of Unilever’s resolve and already-stretching deal economics.”

GSK plans to demerge and list the consumer healthcare business but is open to a sale if it can deliver better returns for shareholders. 

The firm has been under intense pressure from feared US activist investor Elliott Advisors, which has urged it to explore a sale. 

GSK said Unilever’s three bids “fundamentally undervalued the consumer healthcare business and its future prospects”, arguing it failed to recognise the division’s “potential”.

It added that it “remains focused on executing its proposed demerger” and the spin off “is on track to be achieved in mid-2022”.

Unilever argued the GSK consumer healthcare division is “a leader in the attractive consumer health space and would be a strong strategic fit as Unilever continues to re-shape its portfolio”.

News of the bids came just days after one of Unilever’s top investors blasted the firm for its “ludicrous” focus on sustainability.

Terry Smith, who manages the £29bn Fundsmith Equity fund, said in a letter to his investors: “A company which feels it has to define the purpose of Hellmann’s mayonnaise has, in our view, clearly lost the plot.

“The Hellmann’s brand has existed since 1913 so we would guess that by now consumers have figured out its purpose (spoiler alert – salads and sandwiches).”

Unilever and GSK declined to comment.

Related Posts

sbu conducts searches in uoc mp churches in zhytomyr region

SBU conducts searches in UOC MP churches in Zhytomyr region (photo)

The main goal is to detect and counteract the subversive activities of the Russian special services. Searches are underway in the houses of the UOC-MP in Ukraine…

latvia revoked the license of the russian rain

Russian “Dosh” will stop broadcasting in all Baltic countries

The Latvian license gave the channel the right to distribute its content in the European Union, the USA and other countries. facebook.com/tvrain Following Latvia, the broadcasting license…

the price of oil went up bloomberg

The price of oil went up – Bloomberg

West Texas Intermediate oil rose to $73. per barrel On December 5, 2022, EU oil sanctions against Russia entered into force / ua.depositphotos.com After several days of…

they were looking for air defense and artillery depots in

They were looking for air defense and artillery depots: in Odesa, the SBU detained a couple of spies (photo)

Both were citizens of the Russian Federation, who were sent to Odessa four years ago. The SBU detained a couple of spies / SBU The Security Service…

the cash dollar in privatbank became cheaper

The cash dollar in “PrivatBank” became cheaper

You can sell American currency in the bank at the exchange rate of UAH 39.20. per dollar The exchange rate of the euro against the hryvnia rose…

the dream game journalists shared their impressions of diablo 4

The dream game: journalists shared their impressions of Diablo 4 and laid out new gameplay

According to reporters, this is exactly the project that fans deserve. Diablo 4 / photo by Blizzard Today, December 8, the ban on the publication of preliminary…

Leave a Reply

Your email address will not be published. Required fields are marked *