Unilever (LON:ULVR) has invited private equity bidders to submit offers for its spreads business by October 19, Reuters has reported. The news comes after the sales process kicked off last month, with the Anglo-Dutch consumer goods giant looking to offload the division in an effort to unlock value for investors in the wake of Kraft Heinz’s failed bid earlier this year.
Unilever’s share price has been subdued in London in today’s session, having shed 0.70 percent to 4,382.50p as of 13:48 BST. The stock is underperforming the broader UK market, with the benchmark FTSE 100 index having climbed into positive territory and currently standing 0.21 percent higher at 7,523.54 points.
Sources with knowledge of the matter told Reuters yesterday that Unilever had invited bidders to submit tentative offers for its $8 billion margarine and spreads business by October 19. While the auction, which kicked off last month, has been dominated by private equity firms which have been lured by the unit’s strong profit margins, the sources cautioned that the valuation might prove difficult with Western customers cutting back on bread and margarine.
The sale, which is led by Morgan Stanley and Goldman Sachs, could nevertheless fetch as much as £6 billion and is reportedly expected to wrap up toward the end of the year.
The news comes after it emerged earlier this week that bidders for Unilever’s spreads division were signing up some of the group’s former top executives to get an edge in the auction process. Sean Gogarty, who quit as the unit’s chief executive in 2015, has reportedly agreed to work for a consortium comprising Blackstone and CVC Capital Partners ahead of a formal offer. A rival bidding group consisting of Bain Capital and Clayton Dubilier & Rice meanwhile is understood to have snapped up James Hill, a former Unilever troubleshooter.