We would love to hear your thoughts about our site and services, please take our survey here.
Unilever's management risks coming under further pressure after an aggressive activist investor was reported to have built a stake in the Marmite maker.
Unilever© Provided by The Telegraph Unilever
News of the move by Nelson Peltz’s Trian Partners emerged after Unilever suffered its biggest weekly share price fall since March 2020 following a failed £50bn bid for GlaxoSmithKline's consumer health business, wiping £6bn off the value of the company.
The size of Trian’s stake, first reported by the Financial Times, is unknown but the presence of Mr Peltz is likely to intensify the pressure on Unilever’s chief executive Alan Jope after the swiftly aborted GSK deal.
The billionaire has turned his gaze on Unilever months after retiring from the board of rival Procter & Gamble after a four-year campaign to improve performance at the company, which helped drive an 85pc jump in the share price.
Unilever’s brief foray into major M&A comes after months of slowing sales and increasing anger among investors at the board’s strategy. The company’s shares have underperformed major rivals including Nestle, P&G, PepsiCo and L’Oreal over the past five years.
Fund manager Terry Smith called Unilever’s GSK bid a “near-death experience” and urged the company to focus on fixing its own business.
Video: McGonegal On 2022 Investment Strategy (Bloomberg)
Pause
Current Time 0:00
/
Duration 5:04
Unmute
0
HQ
CaptionFull screen
McGonegal On 2022 Investment Strategy
Click to expand
Mr Smith also complained that the company had “lost the plot” in seeking to promote the sustainable ethos of brands such as Hellmann’s rather than focusing on financial returns.
Analysts warned the mooted deal would leave the company laden with debt while investors have warned Mr Jope off any major M&A.
Mr Peltz’s interest comes exactly five years after Kraft’s failed bid for Unilever prompted an overhaul of its cumbersome structure and the offloading of its PG Tips tea business.
The company has promised further change this week with the unveiling of a new “operating model that will drive greater agility”.
Trian and Unilever declined to comment.
Trian, founded by Mr Peltz in 1985, has $8.5bn in assets under management including stakes in Bank of New York Mellon, chemicals company DuPont and food firm Mondelez International. Mr Peltz’s daughter, actress Nicola, is engaged to former footballer David Beckham's son, Brooklyn.
https://www.ft.com/content/a17a6811-78a8-4eb7-a2be-adbb8eb75119
I think the deal is dead.
Emma Walmsley has reportedly set up sovereign wealth fund meetings with Singapore and Qatar next month to help underwrite any future deals and to take major stakes. I read it today on a financial thread whilst in a meeting
Managed to get my average down to 37.60 and picked up 110 more shares.....other wise a self inflicted crap day by the BOD.
At this rate it will be unilever fighting off the take over sharks......disappointing day.....quite unnecessary
Here is a far-fetched prediction, but sitting here drinking my coffee.....it seems possible.
Unilever has bid £50 billion for the health products side of GSK. Initially rejected of course but has a good chance of going through as both CEOs are under massive pressure to improve performance. and to be seen to make active changes to their businesses.
This would leave the pharma side of the GSK business with about £40 billion cash burning a hole in its pocket and looking for growth to acquire. Not a bad synergy between the new GSK and SN. as a bolt-on addition...If it ever happens, you saw it here first....HA! My predictions of this type hardly ever work out though!!!
I feel this may be a done deal...or soon to be.
Both CEO's are under enormous pressure to show some form of improvement in their respective businesses. Both have activist investors on their case and high-profile fund managers demanding change in the press.
They will dance around a little and then settle on a win-win for them.......not necessarily for everyone though! It is human nature....the path of least resistance.
I hold both companies in roughly equal amounts .. I am not expecting anything but a neutral result in my situation. If you only own GSK you could do pretty well. Will be interesting watching this unfold.
Personally I think you probably have enough SN. At 18.5%. my max is 10% in any one share. I use dividend payments and a little monthly fresh cash to buy new stocks or increase holdings in existing stock. I try to ensure I have decent exposure to different countries and sectors. I go for good established brands that have been around for decades, good return on capital and a growth story. I have tried many strategies....slow and steady works better for me than get rich quick.
I am sure there are many who dabble in bitcoin and disagree.....I just don't understand that stuff.
Regards
Agree entirely. I think SN. Is currently in the " coiled spring" position. As soon as non urgent/elective surgery gets the green light and capacity ( mainly staffing) frees up in NHS and Private sector, then I think there will be a fairly rapid and substantial build in demand for SN. Products. It is nice when you get the chance to both help people and make money simultaneously.
stockready,
I do understand your point to a degree. I bought Unilever more as a proxy bond as my asset allocation had gone out of kilter. I see no point whatsoever buying bonds in the current environment, but Unilever will add some stability and a nice dividend token which will continue to grow. That aside, I opened a position here today with an initial purchase of 400 shares. I certainly see the growth story here going forwards and with 6 million people on the waiting list of the NHS.....nearly 10% of the population .....quite unbelievable......Then SN. will be doing well to keep up with the demand going fowards.....a nice place to be!