Shares in Unilever (LON:ULVR) have jumped more than 12 percent today after it emerged that Kraft Heinz had approached the Marmite owner with a $143-billion takeover proposal. The FTSE 100 group, however, has rejected the bid which would have brought together brands including Dove soap and Heinz ketchup.
As of 13:08 GMT, Unilever’s share price had spiked 12.61 percent to 3,769.50p. The group’s shares have added more than 23 percent over the past year, and are up by some 14 percent in the year-to-date.
Kraft Heinz confirmed in a statement today that it had made a proposal to Unilever about combining the two groups “to create a leading consumer goods company with a mission of long-term growth and sustainable living”. The confirmation came after FT Alphaville reported earlier today that Kraft Heinz had made an approach to Unilever, citing people briefed on the matter.
Kraft Heinz noted that while the Anglo-Dutch consumer group had rejected the proposal, “we look forward to working to reach agreement on the terms of a transaction”.
Unilever issued a separate statement, noting that the proposal represented a premium of 18 percent to the group’s share price as at the close of business on February 16, and arguing that it ‘fundamentally undervalues’ the company. The cash-and-shares offer, which would have seen shareholders in the Anglo-Dutch company receive $50.00 per share, values Unilever at a total equity value of approximately $143 billion.
“Unilever rejected the proposal as it sees no merit, either financial or strategic, for Unilever's shareholders,” the FTSE 100 group pointed out, adding that it did not “not see the basis for any further discussions”.
The BBC quoted Nicholas Hyett, equity analyst at Hargreaves Lansdown, as commenting that “with Kraft Heinz saying it'll be coming back to the table, it looks like the initial offer was just to test the water”.
Bloomberg noted in its coverage of the news that a potential tie-up between Unilever and Kraft Heinz would be the largest takeover ever in the food or beverage industries, surpassing AB InBev’s $123-billion purchase of SABMiller last year.