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‘Unilever could spread out GBP 6bn asset sale’
Posted on Monday, 20 March 2017 08:52
Unilever is reportedly preparing a multi-billion-pound disposal as it deals with shareholder criticism following the rebuffed offer made by Kraft Heinz earlier this month.
A number of British papers picked up on the potential disposal over the weekend, including the Sunday Times, which noted spread brands such as Flora and Stork are among the assets that could be sold.
According to the paper, Unilever is expected to publish a strategic review next month with chief executive Paul Polman said to be addressing concerns after Kraft Heinz’s USD 143.00 billion bid for the company was rejected.
The group is working on a divestment process said to raise around GBP 6.00 billion, the Telegraph observed, citing sources as saying private equity firms such as Bain Capital, CVC and Clayton Dubilier & Rice have already started working on offers.
After rejecting the bid, there were rumours Unilever would respond by buying another rival, possibly toothpaste juggernaut Colgate-Palmolive, or potentially separating from its entire food division.
However, the Telegraph noted Polman’s next move is expected to be more measured.
A disposal of Unilever’s entire margarines assets, which are said to represent a third of the entire market globally, is now its number one priority with plans to cut costs and boost shareholder payouts through share buybacks or dividends.
The results of the strategic review are expected to be revealed in the coming weeks, the Telegraph reported, with the Guardian adding the group is also considering raising up to USD 15.00 billion to fund acquisitions.
Another article by the latter last month suggested Unilever was considering options and even upgraded its profit margin in a bid to fend off a revised proposal by Kraft Heinz.
Shares in the company, which is behind brand such as Dove, Magnum and Ben & Jerry’s, spiked 13.4 per cent after the USD 143.00 billion offer was made in February and have climbed 24.6 per cent since the beginning of this year.
Unilever’s stock price closed up at GBP 40.45 on 17th March, the last trading day prior to the reports, valuing the company at around GBP 51.85 billion.
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