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Kraft Heinz makes audacious Unilever bid but analysts are unconvinced

Friday, February 17, 2017 9:19
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Kraft Heinz (NASDAQ:KHC) spooked the market with its audacious and opportunistic bid for food titan Unilever (NYSE:UL) on Friday.

Friday’s are often a day for takeover rumours. But this was confirmed, and later rejected by the Swiss food conglomerate.

Kraft, no novice hoovering up brand names like Cadburys in 2010 and more recently taking in Heinz and its 57 varieties, made its $112bn bid for Unilever while the US dollar is surgning.

“An approach for Unilever is a sure sign of the surge in dollar buying power and the decline in Sterling. Today’s 10% rise in Unilever’s share price means this is cash neutral for a US purchaser compared with if it had approached seven months ago,” said Neil Shan, director of research at Edison Investment Research.

Certainly, the statement from Unilever PLC rejecting Kraft Heinz’s bid out of hand was short and to the point.

Read: Some added sauce – Unilever bid defence includes former Heinz Kraft adviser

Kraft plans to dusty itself down and have another go. It was smugly saying as much after the rejection. Its investors are certainly egging on the deal to come as the share price was up 8.3% at $94.50 in New York.

Meanwhile, Unilever’s ADRs traded up 9.8% at $46.73.

Story by ProactiveInvestors


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