Unilever share price: Group faces calls to simplify shareholder structure
Feb 22 2017
U.S. company Kraft Heinz's rapid retreat from its surprise bid for Unilever sent the Anglo-Dutch group's shares down over seven percent on Monday in London and Amsterdam.
US food maker Kraft Heinz Co., which had offered $143 billion in cash and stock to buy the Anglo-Dutch consumer goods company, said it has amicably agreed to withdraw its proposal for a combination of the two companies.
Henderson Group Plc's John Bennett, who oversees more than $12 billion, is betting that a failed bid for Unilever may lead the owner of brands like Ben & Jerry's ice cream and Dove soap to consider selling some of its assets.
The companies announced the decision Sunday in a joint press release, saying that Kraft Heinz has "amicably" abandoned the offer.
And they were among the reasons cited by executives in the Kraft Heinz tie up, which was engineered by Warren Buffett's Berkshire Hathaway and 3G Capital, the Brazilian investment firm with a history of taking over companies and aggressively cutting costs. "Kraft Heinz has the utmost respect for the culture, strategy and leadership of Unilever".
Kraft also withdrew its offer because it felt it was too hard to negotiate a deal as its bid had been made public at an early stage.
A spokesperson for Kraft Heinz shared that the company meant to move forward on friendly terms. "Our intention was to proceed on a friendly basis, but it was made clear Unilever did not wish to pursue a transaction". The spokesperson also added that it was in the best interest of both the companies to "step away" in the initial stages so that they can both channel their energies on autonomous plans "to generate value".
Kraft Heinz's bid for Unilever is likely to revive speculation the group could be interested in acquiring Mondelez International, the snack company that was split out of Kraft Foods in 2012.
Thomson Reuters classifies a deal as withdrawn if there is a public announcement by the buyer that the offer is withdrawn or financial and legal advisers agree that it has been withdrawn.
Unilever, in rejecting the US$50-a-share offer, said the proposal "fundamentally undervalues" the household products maker.
Nevertheless, the United States company was reported to be planning to woo major Unilever investors directly, possibly increasing the bid by £10bn.
At the time, some had speculated on a possible offer of Kraft Heinz on Unilever, notably to revive internationally.