Unilever Plans $7.4 Bln Sale Of Stork, Flora Food Brands: Reports

21-Mar-2017 - United Kingdom

Unilever plc is preparing to sell some of its food brands in a 6 billion pounds or $7.4 billion deal, partly in response to the recently rejected takeover offer from Kraft Heinz, British media reported.

The Anglo-Dutch consumer goods company plans to sell Stork butter and Flora margarine brands, The Sunday Times reported.

Further, The Sunday Telegraph, citing sources, said that private equity firms Bain Capital, CVC, and Clayton Dubilier and Rice have started working on offers for Unilever's non-core margarine division. Kraft Heinz, which is backed by billionaire Warren Buffett and Brazil's 3G Capital, is also tipped as a possible buyer.

The planned sale is reportedly part of a slew of cost-cutting and restructuring measures the Chief executive Paul Polman will undertake next month following shareholder pressure in response to the rejected $143 billion offer from the American food giant.

To boost the shareholder support, Unilever in late February had that it is conducting a comprehensive review of options available to accelerate delivery of value for the benefit of shareholders. The company then said, "The events of the last week have highlighted the need to capture more quickly the value we see in Unilever. We expect the review to be completed by early April, after which we will communicate further."

It was in mid-February that Kraft Heinz said it amicably agreed to withdraw its proposal for a combination of the two companies. Unilever rejected the offer, noting that it fundamentally undervalues the firm.

As per Kraft Heinz's proposal, Unilever common shareholders were to receive $50 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.  The potential offer represented a premium of 18 percent as at the close of business on February 16.

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