Kraft to make another bid for Unilever?
US consumer goods giant Kraft Heinz could make another takeover bid for Anglo-Dutch rival Unilever (ULVR) very soon, according to a US analyst.
UK takeover rules prevent Kraft from tabling a new offer until mid-August, being a six month window since its previous $143bn bid.
Pablo Zuanic, an analyst at trading firm Susquehanna, thinks a hostile takeover approach from Kraft Heinz is more than 75% likely to happen. He notes the company has made no moves on M&A since its aborted pursuit of Unilever, implying that the FTSE 100 member remains its prime aquisition target.
Unilever successfully brushed off Kraft’s previous offer in February 2017. It has subsequently revealed a shift in strategy involving cost cutting, share buybacks and fresh acquisition activity of its own.
These actions, combined with a tailwind from the weaker pound, have helped lift Unilever’s share price above £40.
Zuanic believes Unilever would now cost close to $200bn to buy given the increase in its share price and the likely need for a 20% premium to entice shareholders to sell.
‘A 20% premium to the current Unilever share price would imply around 50% gains year-to-date for Unilever shareholders (i.e., we think they would fold),’ he adds.
Zuanic thinks the deal could be partially funded by Kraft selling some of its own assets.