Unilever Shares Soar 11% As Kraft Heinz Pursues $139 Billion Takeover


Unilever said Kraft's proposal represented an 18pc premium to its share price on Thursday, the day before news of the bid was announced in a stock market statement.

But Unilever - the parent of brands such as Dove, Vaseline and Q-tips - said that the offer "fundamentally undervalues" the company and provides no financial or strategic merit for Unilever shareholders, according to a statement acquired by Reuters.

Unilever today has already rejected the proposal, but Kraft Heinz has signaled it plans to be persistent. Though Unilever has managed to stave off the bid, but it remains to be seen what happens ultimately.

Further, Kraft Heinz noted that Unilever has declined the proposal, however it go ahead on the terms of transaction. However, the company continued, there can be no certainty that any further formal proposal will be made. "The combined entity would have a huge brand footprint and be able to flex bargain muscles even more with supermarkets", Neil Wilson, an analyst at London broker ETX Capital, told BBC News.

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"The Kraft Heinz Company notes the recent speculation regarding a possible combination of Kraft Heinz and Unilever plc / Unilever NV".

The Kraft Heinz Company (NASDAQ:KHC) performance during the last one year Improved 22.22 percent, while its year to date (YTD) performance showed a Negative trend of -0.05 percent.

Unilever revealed that the offer was a mix of cash and shares, valuing it at $143 billion (£115 billion). A P/B ratio of less than 1.0 can indicate that a stock is undervalued, while a ratio of greater than 1.0 may indicate that a stock is overvalued. The stock gained as much as 12 percent in Amsterdam, while Kraft Heinz gained about 4.7 percent in pre-market trading in NY.

'Kraft Heinz's approach demonstrates the pressure on brand owners to consolidate in the face of global pressure on margins and constraints to organic growth opportunities, ' he said.

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In 2015, Kraft, backed by Brazil's private equity titans 3G Capital and billionaire Warren Buffett's Berkshire Hathaway investment vehicle, completed the takeover of Heinz.

It employs people in more than 40 countries worldwide.

Investment bankers at independent advisory firms Lazard and Centerview Partners are once again at the negotiating table to discuss a huge deal involving the USA foods major Kraft Heinz. The stock has an operating margin of 21.90% and a net profit margin of 10.40% This appreciation has taken its price 30.45% above the 52-week low.

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