Unilever on the City’s lips as chatter lays foundation for Estée Lauder bid
Rumours were bubbling that Estée Lauder, the American cosmetics giant with a market value of almost $40 billion (£31 billion), is being circled by interested parties.
City sources said the frontrunner is consumer goods giant Unilever. The company, which fended off a £115 billion takeover from Kraft Heinz so far this year, is weighing an approach, they said.
Unilever chief executive Paul Polman, keen to prove to shareholders the company is better off alone than as part of Kraft, is thought to be keen to bulk up in case the American firm returns with another bid. It is in the middle of selling its spreads business, including Flora, for around £6 billion.
The sources said Unilever, off 15.82p today at 4510.5p, will probably face competition from the likes of French cosmetics heavyweight L’Oréal, as well as 3G and Warren Buffett’s Berkshire Hathaway, who together control Kraft.
JAB, the owner of Rimmel-to-Max Factor group Coty which is selling shoemaker Jimmy Choo, is also tipped to join the fray, although there are questions about whether it would be able to finance a deal of that size.
Any bidder will have to win over the Lauder family. It still owns around 40% of Estée Lauder and nearly 90% of the voting rights. Unilever declined to comment. Estée Lauder and JAB could not be reached for comment.