There are only three parties left in the auction for Unilever’s (LON:ULVR) spreads business, Reuters has reported. The sale is part of the Anglo-Dutch giant’s efforts to simplify itself and unlock more value for shareholders in the wake of Kraft Heinz’s failed bid earlier this year.
Unilever’s share price has been little changed in London in today’s session, having added 0.036 percent to 4,218.50p. The stock is nevertheless outperforming the broader UK market, with the benchmark FTSE 100 index having fallen into the red and currently standing 0.19 percent lower at 7,379.48 points.
Sources with knowledge of the matter told Reuters yesterday that private equity firms Apollo, KKR and CVC Capital Partners were the final three parties left bidding for Unilever’s margarine and spreads business. The people noted that second-round bids for the business, which could be worth more than $7 billion, were due in mid-December.
CVC had originally teamed up with Blackstone but reportedly is now on its own. Private equity firm Clayton Dubilier & Rice had teamed up with Bain Capital on a joint bid, but the pair are thought to have left the race.
Sources further indicated to the newswire that Goldman Sachs, Morgan Stanley and Mizuho had provided a staple financing that will be offered to potential buyers totalling €4 billion, more than five times the business’s earnings before interest, tax, depreciation and amortisation (EBITDA) of between €700 million and €750 million.
Unilever put the business on the block earlier this year in the wake of the surprise takeover approach from Kraft-Heinz, which prompted the Anglo-Dutch group to review its business. The FTSE 100 company said earlier this week that it was conducting a review of its dual-headed legal structure, and considered that unification with a single share class would be in the best interests of the company and its shareholders.