Kraft Heinz Co caught Unilever plc (ADR) off guard on Friday with a surprise takeover bid of $143 billion. This offer comes to $50 per share for UL stock. That’s roughly a 17% premium over the stock’s closing price on Thursday. The offer was for $30.23 per share in cash and 0.222 of a new entity for each UL share.
Unilever plc (ADR) has rejected the takeover bid from Kraft Heinz Co. It claims this undervalues the stock and suggests investors not to take action due to the offer. KHC says that it is still hoping to work with UL for a takeover. This likely means the food and beverage company is willing to offer more.
“This is cheap money meeting industrial logic,” Steve Clayton, the manager of the HL Select UK Shares fund at Hargreaves Lansdown, told Reuters. “Kraft Heinz are attempting a massive push on the Fast Forward button…to acquire the sheer scale of brands that Unilever represents through one-off acquisitions could take decades.”
Pablo Zuanic, the senior equity analyst at Susquehanna International Group, says that Unilever plc (ADR) would have to do some divesting to make the deal worthwhile. He says that if UL were to accept an offer from Kraft Heinz Co, it would need to “divest or sell the household personal care business, otherwise the deal is not doable based on the math.”
UL stock was up 10% and KHC stock was up 7% as of noon Friday.