The Lemon Fool

I must say all this negative nonsense about Unilever has just been stirred up with nothing to go on except market reaction. This should never have been in the public domain and then Unilever would just have been trundling on. Companies have got to seek new areas all the time especially a portfolio company like Unilever. Wouldn't it be ironic if GSK floats its division over the summer and the market decides that it is worth say 42.52 billion; Unilever comes along and offers to relieve the shareholders of this investment thrust upon them at a price of £49 billion? Could easily happen. Shareholders would I imagine be pretty happy.

Dod

They are not going to increase their bid anyway, according to an article in The Times today.

Bouleversee wrote:They are not going to increase their bid anyway, according to an article in The Times today.

That is the case Lorna. See my post from yesterday, and the RNS re this here; viewtopic.php?p=474496#p474496

They even said;

Accordingly, we will not increase our offer above £50bn

Ian.

It seems Terry Smith still holds but has had another swipe at the board for the "near death experience" of the bid for GSK Healthcare:

https://www.ft.com/content/210a5297-159 ... 3b1d04c4a1

Sorry if link doesn't work. You can Google: "Terry Smith launches new attack on Unilever management" to view it.

I look forward to receiving my copy of the letter!
All the best, Si

simoan wrote:It seems Terry Smith still holds but has had another swipe at the board for the "near death experience" of the bid for GSK Healthcare:

https://www.ft.com/content/210a5297-159 ... 3b1d04c4a1

Sorry if link doesn't work. You can Google: "Terry Smith launches new attack on Unilever management" to view it.

I look forward to receiving my copy of the letter!
All the best, Si

Thanks. I admire the fact Smith has the balls to say things that actually chimes with what lots of other people are thinking but are not saying.

In a way this chimes with Phillip Morris buying Vectura.
An unhealthy brand buying a Health business.

Now we have Unilever being pilloried for selling unhealthy food... well why wouldn't they given they are a mass-marketer and clearly there are many people who are happy to eat it...
https://www.cityam.com/after-a-week-from-hell-shareholders-tell-unilever-to-focus-on-health-to-avoid-being-struck-hard-by-regulatory-changes/

Or in this case, an unhealthy brand failing to buy a Health business.

V8

If I had an £800m + investment in a company I wouldn't be shouting from the rooftops about how badly managed it is!

It would be better for Smith to talk directly with Jope and not bandstand in the newspapers!

monabri wrote:If I had an £800m + investment in a company I wouldn't be shouting from the rooftops about how badly managed it is!

It would be better for Smith to talk directly with Jope and not bandstand in the newspapers!

Perhaps he has been talking to management over the years, has got nowhere, and is now doing this to force them to listen!
Well done Terry!

scrumpyjack wrote:

monabri wrote:If I had an £800m + investment in a company I wouldn't be shouting from the rooftops about how badly managed it is!

It would be better for Smith to talk directly with Jope and not bandstand in the newspapers!

Perhaps he has been talking to management over the years, has got nowhere, and is now doing this to force them to listen!
Well done Terry!

He obviously has been speaking to them. If you read the FT article.

They added that while Unilever said that the bid worked on financial metrics, including return on capital, “getting management to discuss what that number was, was like a dentist pulling a back tooth”.

So, when push came to shove, they could not justify the bid on financial metrics to a major shareholder. That should make everyone wary, not just Terry Smith.

All the best, Si

I think this will be the last straw. He will sell. Poor management trumps good assets. He knows this and management seems incapable of learning.

Humeau wrote:I think this will be the last straw. He will sell. Poor management trumps good assets. He knows this and management seems incapable of learning.

Parallels here of when he exited Imperial Brands. He was scathing about the gobbledygook management speak at the company. He actually quoted the IMB chief exec at one of his annual shareholder meetings. He declared that he couldn't invest in a company where the executive team couldn't communicate with shareholders in simple English. He sold the shares. I think this is a similar situation. I think Smith has a very valid point when he says trying to justify a jar of mayonnaise having a higher purpose than spreading on sandwiches was showing ULVR had lost the plot. I agree with him.

The update is on Fundsmith’s website and worth a read. I have held since 2013 but hadn’t realised the relative underperformance vs. consumer peers.

Best wishes


Mark

ADrunkenMarcus wrote:The update is on Fundsmith’s website and worth a read. I have held since 2013 but hadn’t realised the relative underperformance vs. consumer peers.

Best wishes


Mark

Here it is: https://www.fundsmith.co.uk/media/iljh2 ... nd_gsk.pdf

Typically forthright common sense and analysis from Terry Smith.
All the best, Si

I've been thinking of getting rid of some of my ULVR even before this GSK bid as I want to focus more on Investment Trusts.

So, just sold half my holding and topped up:

Scottish Mortgage (SMT)
Merchants Trust (MRCH)
Murray International (MYI)

Better diversification and only a very small drop in overall income (due to the yield on SMT), which is made up elsewhere as I continue to reinvest in my SIPP and ISA's.

I think Smith should sell up (and shut up)! It's as if he has woken up one morning last week after 11 years and thought " ooh, Unilever are not doing so well." . The man is running a concentrated portfolio, is he admitting he has been asleep at the wheel as Ulvr has been navigating off course? He claims that they didn't call him for the first 8 years...err, Terry, why didn't you dump them then?

"Maybe it’s now more difficult to ignore us but to be fair communications have improved markedly post
the Polman regime and we were consulted on the GSK approach." SMITH et al.

I wonder what was said!

Maybe Smith should be asking why Fundsmith is only doing slightly better than an S&P 500 tracker ( Vanguard's VUSA) over the last 5 years? What happened to the "buy good companies....do nothing" as he sells out of IHG, Sage, RKT and others ( some bought and sold very quickly...Chlorox)? There's been a lot of sales of good companies that have apparently become bad. What will happen when the US market turns and Fundsmith's 1% charges start to bite?

simoan wrote:

ADrunkenMarcus wrote:The update is on Fundsmith’s website and worth a read. I have held since 2013 but hadn’t realised the relative underperformance vs. consumer peers.

Best wishes


Mark

Here it is: https://www.fundsmith.co.uk/media/iljh2 ... nd_gsk.pdf

Typically forthright common sense and analysis from Terry Smith.
All the best, Si

Thanks for that. I wonder how long Fundsmith will hang on to Unilever after that. Quite interesting timing because with a bit of luck we could see a more normal AGM this year and there ought to be some interesting questions for the management. Smith does not seem to have much time for the CFO and I must say I see him as less than impressive. Polman was very dominant and for a short while they had an almost timid Dutchman as Chairman. He fell on his sword when the move to Holland failed, but they now need stability to get a grip on the whole situation and I hope they do. I will not be selling.

Meanwhile the share price is slowly recovering.

Dod

Addendum

Having been " consulted " on GSK healthcare opportunity, Smith had a perfect early warning to dump.

monabri wrote:Addendum

Having been " consulted " on GSK healthcare opportunity, Smith had a perfect early warning to dump.

That's not correct. Once you are made an insider on any corporate action your hands are tied by the law of the land, whether you're a private investor, or the manager of a multi-billion pound fund, insider dealing is illegal. He can dump now though

All the best, Si

I wonder if PayPal will be the next on TS' chopping block..?

monabri wrote:Maybe Smith should be asking why Fundsmith is only doing slightly better than an S&P 500 tracker ( Vanguard's VUSA) over the last 5 years?

The S&P 500 has almost doubled in the last 5 years, with dividends on top, so that is not a terrible performance. Call it 15% annually.

Compared with the FTSE-100, Smith did much better.