Donate to Remove ads

Got a credit card? use our Credit Card & Finance Calculators

Thanks to 87investor,longview,Sussexlad,niord,staffordian, for Donating to support the site

The Kraft Heinz Company Statement Regarding Unilever plc

For discussion of the practicalities of setting up and operating income-portfolios which follow the HYP Group Guidelines. READ Guidelines before posting
Forum rules
Tight HYP discussions only please - OT please discuss in strategies
idpickering
Lemon Half
Posts: 6092
Joined: November 4th, 2016, 5:04 pm
Has thanked: 1126 times
Been thanked: 2251 times

The Kraft Heinz Company Statement Regarding Unilever plc

#32318

Postby idpickering » February 17th, 2017, 12:24 pm

"The Kraft Heinz Company ("Kraft") notes the recent speculation regarding a possible combination of Kraft and Unilever plc / Unilever NA ("Unilever"). Kraft confirms that it has made a comprehensive proposal to Unilever about combining the two groups to create a leading consumer goods company with a mission of long-term growth and sustainable living. While Unilever has declined the proposal, we look forward to working to reach agreement on the terms of a transaction. There can be no certainty that any further formal proposal will be made to the Board of Unilever or that an offer will be made at all or as to the terms of any transaction."

Full item here;

http://www.digitallook.com/cgi-bin/dlme ... d=25568239

ULVR up 5% as I type.

monabri
Lemon Quarter
Posts: 4342
Joined: January 7th, 2017, 9:56 am
Has thanked: 527 times
Been thanked: 1365 times

Re: The Kraft Heinz Company Statement Regarding Unilever plc

#32320

Postby monabri » February 17th, 2017, 12:32 pm

9.48% (darn it - no holding). But it's all about the Divi ....

monabri
Lemon Quarter
Posts: 4342
Joined: January 7th, 2017, 9:56 am
Has thanked: 527 times
Been thanked: 1365 times

Re: The Kraft Heinz Company Statement Regarding Unilever plc

#32322

Postby monabri » February 17th, 2017, 12:35 pm

They've declined the marriage proposal 12:19 LSE news.

StepOne
Lemon Slice
Posts: 639
Joined: November 4th, 2016, 9:17 am
Has thanked: 188 times
Been thanked: 169 times

Re: The Kraft Heinz Company Statement Regarding Unilever plc

#32326

Postby StepOne » February 17th, 2017, 12:48 pm

monabri wrote:They've declined the marriage proposal 12:19 LSE news.


Yes, that was in the statement, but the rumour now is that Kraft is considering a takeover around £40 per share.

miner1000
2 Lemon pips
Posts: 154
Joined: November 4th, 2016, 1:36 pm
Has thanked: 13 times
Been thanked: 90 times

Re: The Kraft Heinz Company Statement Regarding Unilever plc

#32332

Postby miner1000 » February 17th, 2017, 1:06 pm

The interesting aspect of this particular news (from a HYP Practical perspective), is how many seasoned HYPers will actually sell on this news.

I am a committed LTBH HYPer (as those who have seen my posts will know), but even I am tempted by this situation.

The HYP argument of course is that the divi is unlikely to change and if Kraft do make a takeover, then the corporate action will take place whether we like it or not and we should see a good capital return.

The counter argument says why should we wait. we can bank the next three years dividend income just by selling today, and if the takeover does occur and it involved complex share swaps, we might end up with something that is not very tasty for a UK based HYP (a la Vodafone).

It might be interesting if someone ran a poll to see if there are many die-hard HYPers that intend to sell out over the next week or two.

This is the most excitement that my HYP has seen since International Power got taken out in 2009 (was it?).

Miner

ReformedCharacter
Lemon Quarter
Posts: 1456
Joined: November 4th, 2016, 11:12 am
Has thanked: 890 times
Been thanked: 435 times

Re: The Kraft Heinz Company Statement Regarding Unilever plc

#32339

Postby ReformedCharacter » February 17th, 2017, 1:14 pm

ap8889 wrote:Would prefer to keep my Unilever shares. Offer 50 quid I maybe tempted.

Yes, quite so!

I bought a holding in 2014 @ 2491.3 and some more a few weeks ago at 3188.8. I'd rather keep them despite the potential for capital gains.

RC

OLTB
Lemon Quarter
Posts: 1223
Joined: November 4th, 2016, 9:55 am
Has thanked: 1171 times
Been thanked: 493 times

Re: The Kraft Heinz Company Statement Regarding Unilever plc

#32342

Postby OLTB » February 17th, 2017, 1:17 pm

Gah! Just starting to build HYP and what with SKY and ULVR, possibilities that more work required! Is this a common occurrence or is it more like the proverbial buses?

Cheers, OLTB.

StepOne
Lemon Slice
Posts: 639
Joined: November 4th, 2016, 9:17 am
Has thanked: 188 times
Been thanked: 169 times

Re: The Kraft Heinz Company Statement Regarding Unilever plc

#32365

Postby StepOne » February 17th, 2017, 2:10 pm

I'm doing nothing. I'd be quite happy for this deal to not materialise, but if it does, I guess it's still possible that they might go down the merger route rather than takeover, and either way there is still a chance that a London listing will be maintained, so hanging on might be worthwhile. I don't want to have to go through the process of deciding what to do with the cash unless I have to.

StepOne

PinkDalek
Lemon Half
Posts: 5536
Joined: November 4th, 2016, 1:12 pm
Has thanked: 1412 times
Been thanked: 1576 times

Re: The Kraft Heinz Company Statement Regarding Unilever plc

#32379

Postby PinkDalek » February 17th, 2017, 2:42 pm

For those who've yet to see this elsewhere:

See also http://www.londonstockexchange.com/exch ... 31725.html

"The proposal received was that Unilever common shareholders would receive $50.00 per share in a mix of $30.23 per share in cash payable in U.S. dollars and 0.222 new enlarged entity shares per existing Unilever share, which valued Unilever at a total equity value of approximately $143 billion.

As at the close of business on 16 February 2017, a mix of $30.23 in cash payable in U.S. dollars and 0.222 Kraft Heinz shares per existing Unilever share would value each Unilever common share at $49.61, representing a premium of 18% to Unilever's share price.
"

OZYU
2 Lemon pips
Posts: 199
Joined: December 31st, 2016, 3:52 pm
Has thanked: 42 times
Been thanked: 139 times

Re: The Kraft Heinz Company Statement Regarding Unilever plc

#32384

Postby OZYU » February 17th, 2017, 2:52 pm

Got an interest at both ends of this one, holding both ULVR and Berkshire H.(BerkB), a major shareholder in Kraft Heinz.

One thing for sure Warren B. , one of three Berk. H. appointees on that Board last time I looked, won't contemplate over paying if it comes to that and is bound to have a major say.

I suppose a merger would be nice, but I feel there would be massive regulatory hurdles to creating such a dominant giant in that business segment. Also it would not particularly bode well for divis imho.

So in the whole I would prefer status quo, getting a little fed up to see so many good'uns vanish from my portfolios, although profitable at the time I suppose, but not as much a potentially in the long run at times.

Ozyu

Dod1010
Lemon Quarter
Posts: 1058
Joined: November 4th, 2016, 10:18 am
Has thanked: 20 times
Been thanked: 164 times

Re: The Kraft Heinz Company Statement Regarding Unilever plc

#32393

Postby Dod1010 » February 17th, 2017, 3:16 pm

It will be complicated by the fact that Unilever has in effect dual nationality. I do not want any deal to go through and feel anything but excited by the news.

Unilever has been a good share for most of the last 20 odd years that I have held it; it pays a decent dividend and strangely enough I have a sense of national pride that we have at least one excellent international company which we should keep.

My fear is though that as Berkshire Hathaway has a 26.8% stake in Kraft Heinz, they have access to deep pockets. I hope they can do an AstraZeneca and rebuff the predator.

To answer miner, I at least would not dream of selling on the news. A one off capital gain is fine but I prefer a dependable well run company that will pay dividends more or less indefinitely.

Dod

idpickering
Lemon Half
Posts: 6092
Joined: November 4th, 2016, 5:04 pm
Has thanked: 1126 times
Been thanked: 2251 times

Re: The Kraft Heinz Company Statement Regarding Unilever plc

#32396

Postby idpickering » February 17th, 2017, 3:24 pm

Dod1010 wrote:It will be complicated by the fact that Unilever has in effect dual nationality. I do not want any deal to go through and feel anything but excited by the news.

Unilever has been a good share for most of the last 20 odd years that I have held it; it pays a decent dividend and strangely enough I have a sense of national pride that we have at least one excellent international company which we should keep.

My fear is though that as Berkshire Hathaway has a 26.8% stake in Kraft Heinz, they have access to deep pockets. I hope they can do an AstraZeneca and rebuff the predator.

To answer miner, I at least would not dream of selling on the news. A one off capital gain is fine but I prefer a dependable well run company that will pay dividends more or less indefinitely.

Dod


Ooh I was tempted to sell and buy a higher yielder until I read your post Dod, particularly your last sentence! I agree with you.

Back to sleep..........

Ian.

monabri
Lemon Quarter
Posts: 4342
Joined: January 7th, 2017, 9:56 am
Has thanked: 527 times
Been thanked: 1365 times

Re: The Kraft Heinz Company Statement Regarding Unilever plc

#32398

Postby monabri » February 17th, 2017, 3:28 pm

HYP mantra .."boring is good!"

Snorvey
Lemon Quarter
Posts: 4075
Joined: November 4th, 2016, 12:51 pm
Has thanked: 1865 times
Been thanked: 2128 times

Re: The Kraft Heinz Company Statement Regarding Unilever plc

#32404

Postby Snorvey » February 17th, 2017, 3:39 pm

A premium of 3 years + dividends, plus the chance to by some higher, even more boring dividends via the likes of GSK or even an equity income IT?

Nah, balls to boring. We all need a little bit of a thrill now and again.

C'mon the Krafty Buffet, dig deeper and lemme feel the fibre of your fabric...

https://www.youtube.com/watch?v=biHg19eQ_nE

(Swear word or three)

monabri
Lemon Quarter
Posts: 4342
Joined: January 7th, 2017, 9:56 am
Has thanked: 527 times
Been thanked: 1365 times

Re: The Kraft Heinz Company Statement Regarding Unilever plc

#32407

Postby monabri » February 17th, 2017, 3:46 pm

alwright..good point, well made!

Lootman
Lemon Half
Posts: 7764
Joined: November 4th, 2016, 3:58 pm
Has thanked: 64 times
Been thanked: 1370 times

Re: The Kraft Heinz Company Statement Regarding Unilever plc

#32415

Postby Lootman » February 17th, 2017, 4:05 pm

OZYU wrote:Got an interest at both ends of this one, holding both ULVR and Berkshire H.(BerkB), a major shareholder in Kraft Heinz.

One thing for sure Warren B. , one of three Berk. H. appointees on that Board last time I looked, won't contemplate over paying if it comes to that and is bound to have a major say.

Yes, it's hard to imagine that Kraft would try and pull this off without the support (and possible funding) of WB.

Now, WB likes boring businesses that throw off a lot of cash. On the other hand Unilver, like all consumer staples shares, is priced very richly by historic and relative standards. After the 2007-2009 debacle, the market has placed a premium on boring companies that sell things that everyone needs.

Proctor and Gamble has spiked up in the last couple of days as well. It's interesting how this sector, which has already seen a huge amount of consolidation, is still the subject of speculation as well. I own PG, Nestles and Unilever, as well as BRK, and so would welcome this deal around 50.

JohnnyCyclops
2 Lemon pips
Posts: 177
Joined: November 15th, 2016, 9:19 pm
Has thanked: 27 times
Been thanked: 10 times

Re: The Kraft Heinz Company Statement Regarding Unilever plc

#32425

Postby JohnnyCyclops » February 17th, 2017, 4:20 pm

Three thoughts...

1. Unilever's been here before. It's an Anglo-Dutch company following the inter-war era merger of Margarine Unie of the Netherlands and Lever Bros. of the UK. It's bought (and sold) many other businesses and brands since. https://www.unilever.co.uk/about/who-we ... r-history/.

2. Astrazeneca shot up by £10 a share in 2014 (around 20%) on the approach by Pfizer, to the mid/high £40s range... and never came back down again. The market took that as its new fair valuation.

3. The post-Brexit referendum effect on foreign exchanges rates does mean UK exports are cheaper. That includes those overseas buyers snapping up UK companies. Doing a deal today is around 15% cheaper than a year ago, if you're carrying a wallet full of US dollars.

Snorvey
Lemon Quarter
Posts: 4075
Joined: November 4th, 2016, 12:51 pm
Has thanked: 1865 times
Been thanked: 2128 times

Re: The Kraft Heinz Company Statement Regarding Unilever plc

#32428

Postby Snorvey » February 17th, 2017, 4:28 pm

4. 'Corporate inversion' (perhaps)

For more than 30 years companies, especially American ones, have been merging with foreign firms or acquiring them outright in order to shift their tax bases abroad. It started in 1982, when McDermott, a construction company, outsmarted America’s Internal Revenue Service (the IRS) by moving its base from New Orleans to Panama, where it had a subsidiary. Ever since, this kind of move, called a “corporate inversion”, has been an attractive way for American companies with overseas earnings to reduce their tax bills.

http://www.economist.com/blogs/economis ... explains-9

Gengulphus
Lemon Quarter
Posts: 3381
Joined: November 4th, 2016, 1:17 am
Been thanked: 1844 times

Re: The Kraft Heinz Company Statement Regarding Unilever plc

#32431

Postby Gengulphus » February 17th, 2017, 4:32 pm

OLTB wrote:Gah! Just starting to build HYP and what with SKY and ULVR, possibilities that more work required! Is this a common occurrence or is it more like the proverbial buses?

The latter, if HYP1 is anything to go by - its takeover victims to date are:

2001: Blue Circle
2002-2005: none
2006: Associated British Ports
2007: Gallaher, Alliance Boots (*)
2008: Resolution (*), Scottish & Newcastle, Alliance & Leicester
2009-2016: none

(*) HYP1's Alliance Boots and Resolution holdings were effectively its original Boots and Britannic holdings renamed in the course of mergers.

Gengulphus

vrdiver
Lemon Quarter
Posts: 2271
Joined: November 5th, 2016, 2:22 am
Has thanked: 414 times
Been thanked: 740 times

Re: The Kraft Heinz Company Statement Regarding Unilever plc

#32432

Postby vrdiver » February 17th, 2017, 4:33 pm

I'm not selling just yet.

If the deal goes ahead, I may sell rather than wait for the corporate action to pay out (I don't particularly want Kraft shares). In the meantime I'm hoping for an AZN type outcome, where the share price retains much of the takeover premium after Kraft are rebuffed. If they're not rebuffed I'd at least like to see a couple more increases in the offer (currently at $50 a share).

What surprised me when looking was that Kraft's shares have also risen, by just over 7.5% as I write. I'd have expected this bid to depress their stock, so I guess there's a lot of Kraft holders and analysts who think this is a steal.

VRD


Return to “HYP Practical (See Group Guidelines)”

Who is online

Users browsing this forum: psychodom, vandefrosty and 5 guests