Faced with intense investor backlash, Unilever now says $68B is its final offer for GSK consumer healthcare business
In an anti-climatic end to a budding takeover fight, Unilever has all but given up on a buyout of GlaxoSmithKline’s consumer healthcare business.
Unilever, the consumer product giant behind household brands like Ben & Jerry’s, Lipton and Vaseline, said in a statement late Wednesday that it will not increase its offer above £50 billion ($68 billion) — which GSK had revealed days ago as its third and latest offer.
At the time GSK dismissed its proposed M&A deal, Unilever insisted on its belief that it would be an “attractive and synergistic combination,” hinting that it’s still determined to pursue a buyout.
According to Unilever, the decision to now walk away is all about maintaining “strict financial discipline.”
“We note the recently shared financial assumptions from the current owners of GSK Consumer Healthcare and have determined that it does not change our view on fundamental value,” read the press release.
But observers and analysts suspect the palpable backlash from Unilever shareholders after GSK publicized the proposed M&A deal was the chief reason for the sudden retreat.
“Investors stopped the bid through the share price and the feedback they gave,” Bernstein analyst Bruno Monteyne told the Financial Times, adding that a call held by his firm with Unilever shareholders the day before was marked by “a torrent of criticism along the lines of: ‘What on earth are they thinking?’”
GSK projects that the consumer healthcare unit, which it plans to spin out as an independent company, could deliver organic sales growth of 4% to 6% over the medium term.