The Lemon Fool

https://www.bloomberg.com/news/articles ... r-unilever

by Devin Banerjee
19 February 2017, 17:40 GMT

Kraft Heinz Co. said it has amicably withdrawn its offer to acquire Unilever.


I wonder why? Maybe problems with Dutch laws, mentioned in the press today.

TJH

I hope the merger doesn't happen

You're ok....it's been called off.....

http://www.bbc.co.uk/news/business-39022692?ns_mchannel=social&ns_campaign=bbc_breaking&ns_source=twitter&ns_linkname=news_central

It must be true - it's been on the Beeb!

I'd guess the problems stemming from European or dual Law considerations may well have put the kibosh on this, in which case is there a hint on the way to go for our future? The Dutch seem to have got it right with these large companies: it is not good enough just to consider the interest of shareholders or directors (who stand to profit enormously).



Arb.

Mmm....or maybe it was something a little more obvious......

http://www.cityam.com/259392/kraft-hein ... l-unilever

City A.M. understands Kraft was not prepared to sweeten its offer to a degree that would tempt Unilever's top shareholders.

City analysts also believe investors were unimpressed by Kraft's advances.

"I guess Unilever's big shareholders told them where to go in talks this weekend," said Joshua Raymond, director at London foreign exchange broker XTB.

So. Unilever directors state emphatically that $50 (say £40) fundamentally undervalued the company. So let's say they reckon true value is £50.

I trust we will see those same directors buying several million pounds of shares tomorrow, as I think they'll be about £35.

Hold on is that a flock of pigs floating across the sky

Of course I may be wrong and Mr Market may give a fair value of £40/£50. Let's see.

toofast2live wrote:I trust we will see those same directors buying several million pounds of shares tomorrow, as I think they'll be about £35.
Hold on is that a flock of pigs floating across the sky

CEO Paul Polman already holds over £16m worth, the CFO Jean-Marc Huët has over £6m, exec. director Graeme Pitkethly has nearly £1m and non-exec director Michael Treschow about half a million. http://www.digitallook.com/equity/Unile ... ctor-deals
How much more do you want them to buy?

"For immediate release 19 February 2017

Joint Statement from Unilever PLC and Unilever N.V. (“Unilever”) and The Kraft Heinz Company (“Kraft Heinz”)

Unilever and Kraft Heinz hereby announce that Kraft Heinz has amicably agreed to withdraw its proposal for a combination of the two companies.

Unilever and Kraft Heinz hold each other in high regard. Kraft Heinz has the utmost respect for the culture, strategy and leadership of Unilever."

It's over! Let's see what happens to the SP when the Market opens Monday morning! GLA........

Tymeric wrote:"I guess Unilever's big shareholders told them where to go in talks this weekend," said Joshua Raymond, director at London foreign exchange broker XTB.[/i]

Maybe so, but those "big shareholders" are probably pension funds and other institutions that are managing the money of others. And those "others" might just fire their fund managers if they keep turning down bids worth $50 only to see the share price go back down to $40 as a result.

Unless Unilever get religion, I suspect this won't be the end of some kind of activist or arbitrage activity.

YeeWo wrote:"For immediate release 19 February 2017
Joint Statement from Unilever PLC and Unilever N.V. (“Unilever”) and The Kraft Heinz Company (“Kraft Heinz”)

http://news.heinz.com/press-release/fin ... inz-compan

No doubt it will be an RNS in the morning.

Isn't there something odd here? Why would KH make a low-end bid and then when - quite predictably - gets immediately rebuffed just walk away? What changed their minds? I presume a company such as KH does some in-depth preparation before getting to the starting blocks.

RC

Well. Lootman

And those "others" might just fire their fund managers if they keep turning down bids worth $50 only to see the share price go back down to $40 as a result.

Unless Unilever get religion, I suspect this won't be the end of some kind of activist or arbitrage activity.

Not if they are interested in long term gains, they won't. Pretty absurd to get annoyed over a price which was too low to start with, but never really existed in the sense that the bid hadn't gone through! Nowt so queer as folk.

And as for arbitrage: those pesky Americans causing trouble again, is my view.

DrBunsenHoneydew wrote:Predict effect on share price tomorrow?

Fall perhaps ! Maybe even a buying opportunity if the market overreacts. I have some funds ready to deploy if that happens.

A bizarre episode. Looks as though Kraft just didn't do their homework. One has to wonder about murkier reasons. Will any of the insider traders be pursued?

No matter. I suspect that over the next few months Unilever's share price, which had already been on an upward trend, may settle at a somewhat higher level than the pre-offer £33. Nothing like a bid to occasion a re-rating.

ReformedCharacter wrote:What changed their minds?

A phone call from Theresa May

moorfield wrote:

ReformedCharacter wrote:What changed their minds?

A phone call from Theresa May

Ah, well spotted! Now reported by the Daily Telegraph.

RC

I suspect that Kraft has not been so crafty after all. As I mentioned earlier, I doubt that they took into account the dual nationality of Unilever and that they were not just dealing with the UK regulators but also Dutch, but it makes Kraft Heinz look a bit silly does it not? Why go to all that trouble as has been said, surely knowing that a first approach would be rebuffed, and then simply walk away?

Anyway I am happy and it may well sharpen up Unilever and its share price, although I would have thought that it will fall back tomorrow.

Keep calm and carry on.

Dod

Now I'll just wait for a mod to tell me I am the one who is off topic.

Terry

Wizard wrote:

Arborbridge wrote:
Now I'll just wait for a mod to tell me I am the one who is off topic.

Terry

Or, in the spirit of a community board, you could report the previous post as off-topic and not be so sackcloth and ashes about it?

Mel

Edited to remove unacceptable text from quoted post. Raptor.

Breelander wrote:

toofast2live wrote:I trust we will see those same directors buying several million pounds of shares tomorrow, as I think they'll be about £35.
Hold on is that a flock of pigs floating across the sky

CEO Paul Polman already holds over £16m worth, the CFO Jean-Marc Huët has over £6m, exec. director Graeme Pitkethly has nearly £1m and non-exec director Michael Treschow about half a million. http://www.digitallook.com/equity/Unile ... ctor-deals
How much more do you want them to buy?

Those weren't bought they were granted. I want to see fists in pockets, Bree. Not options that dilute my holding, thanks.

Like I say, I wanna see some buying now they're so undervalued. Makes sense, no?

Thinking about all of this I cannot help thinking that Warren Buffet has had a hand in calling this off. He does not like hostile bids and my feeling is that he has said 'Wait a minute what the f**k are you doing? If you need my money............', or something similar.

Anyway be that as it may Kraft/Heinz has lost a lot of face as the Chinese would say and it will be hard to live down.

I am very happy to continue to hold Unilever indefinitely.

Dod