Glaxo Smith Kline has rejected three Unilever offers to buy its consumer goods division, including one worth £50bn.With a successful bid, Unilever - which owns Marmite, Dove and PG Tips - would add Sensodyne toothpaste and Panadol to its list of household brands.GSK said in a statement the most recent proposal from Unilever on 20 December contained an offer for £41.7bn in cash and £8.3bn in Unilever shares.
First, the premium you would normally expect to pay for taking control of a business - somewhere in the range of 30% - although that might be reduced by the debt of about £10bn GSK was expected to leave on the books of the consumer business.Third, it may not reflect the higher sales growth targets GSK boss Emma Walmsley has said are possible for the business.
Some will say if higher growth and greater cost reductions are possible, why haven't they happened already? Emma Walmsley has been in charge for more than four years. That's one of the questions activist shareholder Elliot Management has implicitly asked by encouraging other shareholders to agitate for a more radical greater break up of one of the UK's most valuable companies.
Russ Mould, investment director at AJ Bell, said Unilever's CEO Alan Jope was under pressure because the business had recently missed targets for sales and profit margins.
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