Publicly, Unilever (UN, UL) has declined Kraft’s (NASDAQ:KHC) $143B buyout offer. Behind a scenes, Unilever execs are concerned about Kraft’s gusto for slicing costs and a and miss of prophesy for cultivating brands, sources say, adding that Kraft also lacks knowledge handling home and personal-care businesses, that comment for 60% of Unilever’s revenue.
“While both companies sell food, Unilever has followed higher-end brands, such as Ben Jerry’s ice cream and Talenti gelato. Kraft, meanwhile, sells Velveeta and Jell-O.”
“If we was Unilever, we would quarrel this with palm and fist,” Vivaldi branding consultant Erich Joachimsthaler says. “It would vanquish all we applaud about Unilever.”
Unilever jumped 13% on Friday to a record high, while Kraft rallied 11%. The rallies make it some-more expected that Kraft will boost a offer, a source says. Another source records that an merger would count on financing from Kraft’s largest investor, Berkshire Hathaway (BRK.A BRK.B).
The unsolicited proceed from Kraft took Unilever by surprise, sources said. Executives didn’t design an offer from Kraft since they see a companies as too different. The doubt is either Unilever’s financier bottom will see Kraft as a vital fit; note that BlackRock (NYSE:BLK) is a largest shareholder (8%). One probability is that Kraft comes in with a new offer targeting usually Unilever’s food interests (Jefferies). Another probability is that Unilever could find a white-knight swain such as (NYSE:CL) or Kimberly-Clark (NYSE:KMB) (Stifel). Of course, Unilever might only angle for a aloft price.
Article source: http://seekingalpha.com/news/3244566-unilever-dilemma-comes-now