The American giant said it had tabled a “comprehensive proposal”, which was declined. It added: “We look forward to working to reach agreement on the terms of a transaction.”
At 1.45pm, Unilever shares were changing hands for almost £38.10 – just below the offer price of £40 (US$50) in cash and stock tabled for the owner of Knorr Soup and Dove Soap.
“This fundamentally undervalues Unilever.” the company told investors.
“Unilever rejected the proposal as it sees no merit, either financial or strategic, for Unilever’s shareholders. Unilever does not see the basis for any further discussions.”
The City thinks otherwise.
“With Kraft Heinz saying it’ll be coming back to the table, it looks like the initial offer was just to test the water,” said Nicholas Hyett, equity analyst at the investment firm Hargreaves Lansdown.
Slowing growth and competition from fleeter footed rivals has meant consolidation has been on the cards for some time.
The weak pound makes this a great time to strike for opportunistic dollar earning businesses looking to go on a shopping spree on this side of the Atlantic.
Reckitt is in the middle of an acquisition of its own having agreed to splash almost £14.5bn on the baby food maker Mead Johnson.
And remember Kraft Heinz is itself the result of a merger of the two famous American brands in 2015 in a deal hatched by 3G Capital and the multi-billionaire investor Warren Buffett.
Story by ProactiveInvestors