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MarketScreener Homepage  >  Equities  >  Nasdaq  >  The Kraft Heinz Company    KHC

THE KRAFT HEINZ COMPANY (KHC)
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Kraft Heinz : £6bn Flora bidders spread bets on ex-Unilever executives

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10/04/2017 | 07:21pm CEST

Bidders for Flora margarine are signing up some of Unilever’s former top executives to smooth a path to a £6bn takeover of the Anglo-Dutch consumer goods giant’s spreads division.

Sky News has learnt Sean Gogarty, who quit as the unit's chief executive in 2015, has agreed to work for a consortium comprising Blackstone and CVC Capital Partners ahead of a formal offer.

A rival bidding group consisting of Bain Capital and Clayton Dubilier & Rice is understood to have snapped up James Hill, a former Unilever trouble-shooter whose roles included chairing the company's Italian business and the Birds Eye Walls business it used to own.

The scramble to hire former Unilever bosses underlines the intensity of the competition to acquire the spreads division, which also includes Stork margarine and I Can't Believe It's Not Butter.

Private equity firms turn to executives with relevant company and industry expertise when they bid for assets in a bid to give them an edge over rivals.

Unilever decided to conduct an auction of the under-performing spreads operations two months after the FTSE-100 company was targeted by an unsolicited £115bn takeover approach from Kraft Heinz, the US-headquartered food giant.

The move from Kraft Heinz sparked a hostile reaction from the Unilever board and rang alarm bells in Downing Street, where Theresa May had vowed to restrict unwanted foreign takeovers.

A string of other key business figures are also involved in the spreads auction.

Marc Bolland, the former Marks & Spencer and Heineken executive, and Harish Manwani, Unilever's former chief operating officer and the chairman of Hindustan Lever, its Indian subsidiary, are both retained by Blackstone.

CD&R, meanwhile, counts Vindi Banga, a former Unilever foods executive, and Sir Terry Leahy, the former boss of Tesco, among its team of retained talent.

Bain has significant experience of carving out complex business units from large multinationals, having reaped huge gains from its role in acquiring Worldpay, the payments business, from Royal Bank of Scotland.

Other bidders for the unit include the buyout firms Apollo Management and KKR.

Unilever could opt to dispose of the spreads business through a demerger to its existing shareholders if offers are not sufficiently attractive.

Announcing half-year results during the summer, Paul Polman, Unilever's chief executive, said preparations for an auction were "well under way".

Mr Polman, who said that Unilever was becoming a "more resilient, more competitive and more profitable" company, had called for a "level playing field" in response to the Kraft Heinz approach.

He later insisted that he was not calling for the Anglo-Dutch fast-moving consumer goods group to receive special protection from the Government.

Mr Polman has since turned to faster-growing categories for takeover opportunities, snapping up the online-based Dollar Shave Club for $1bn last year and Mae Terra, a Brazilian organic food business, this week.

The spreads category has been in long-term decline as increasingly health-conscious consumers have turned to butter-based products.

Initial offers for the division are understood to be due later this month.

(c) Sky News 2017: <a href="http://news.sky.com/story/1636bn-flora-bidders-spread-bets-on-ex-unilever-executives-11067151">£6bn Flora bidders spread bets on ex-Unilever executives</a>, source Sky News

Stocks mentioned in the article
ChangeLast1st jan.
THE KRAFT HEINZ COMPANY -2.14% 57.1 Delayed Quote.-26.57%
UNILEVER -0.38% 4237.5 Delayed Quote.2.71%
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Financials ($)
Sales 2018 26 266 M
EBIT 2018 6 629 M
Net income 2018 4 408 M
Debt 2018 29 130 M
Yield 2018 4,45%
P/E ratio 2018 16,19
P/E ratio 2019 14,73
EV / Sales 2018 3,76x
EV / Sales 2019 3,66x
Capitalization 69 619 M
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Mean consensus OUTPERFORM
Number of Analysts 22
Average target price 67,6 $
Spread / Average Target 18%
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Managers
NameTitle
Bernardo Vieira Hees Chief Executive Officer
Alexandre Behring da Costa Chairman
Eduardo Pelleissone Executive Vice President-Global Operations
David H. Knopf Chief Financial Officer & Executive Vice President
Melissa Alves Werneck Senior VP-Global People, Performance & IT
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