Unilever shareholders urge disposal of food division - reports
26 FEB 2017
Unilever [LON:ULVR] [AMS:UNIA] shareholders quoted in reports in The Sunday Times and The Sunday Telegraph have separately urged the FTSE-100 consumer goods company to offload its food division. The Sunday Times quoted one of the top 10 shareholders who urged Unilever to sell all or part of its GBP 10.6bn (EUR 12.51bn) food division, while The Sunday Telegraph reported that the 14th biggest investor in Unilever’s Amsterdam-listed shares, Allianz, considers spinning off the Anglo-Dutch group’s food business is the most acceptable option.
The Kraft Heinz Company [NASDAQ: KHC], a Chicago, Illinois-based food company, announced on 17 February that it had made an offer for Unilever and that the Anglo-Dutch company had rejected the bid. Kraft Heinz, which is backed by Warren Buffett and the private equity firm 3G Capital, said on 19 February that it had withdrawn its offer.
Unilever Chief Executive Paul Polman last week said the company will conduct a wide-ranging review, The Sunday Times item said, adding that the results of the review will be disclosed in April.
The review is likely to lead to a sale of some Unilever brands, including Hellmann’s mayonnaise, Marmite and Flora, the report continued.
The top 10 shareholder agreed with Unilever’s rejection of Kraft Heinz’s GBP 115bn (EUR 135bn) takeover bid on the basis that it was not high enough, with the stock component of the offer deemed by the shareholder to be lacking in value.
The shareholder added that Unilever should turn its attention to making large acquisitions for its personal care division. The report noted previous speculation of a Unilever takeover bid for the toothpaste companies Church & Dwight [NYSE:CHD] and Colgate-Palmolive [NYSE:CL].
Unilever refused to comment, the item said.
The Sunday Telegraph report said Unilever is believed to be thinking about spinning off its food division into a separately-listed company.
The newspaper went on to quote Aviva Investors fund manager Giles Parkinson, who said the firm is happy that Unilever’s review will consider all options.
Unilever’s personal care business comprises about 60% of the group and has a sales growth rate of 4.2%, while the company’s food division’s sales are only half that of the personal care arm, the item continued. Unilever’s food division has sales of EUR 10bn, according to the report.
Top shareholders canvassed by The Sunday Telegraph voiced support for Polman, noting that the CEO is under pressure at present.
Link to original source (Sunday Times)