Unilever Has Decided Not To Raise Its 50 Billion Pound Bid For GSK After Getting Rejected
Unilever PLC was supposed to acquire GlaxoSmithKline’s consumer healthcare business but the company has decided not to do it. The organization has revealed that they refuse to raise its 50-billion-pound offer, which GSK rejected previously.
After the news broke Unilever’s US-listed shares sore by 10.1% and GSK’s shares fell by 2.8% on the FTSE before the day’s trading closed.
GSK rejected three bids from Unilever for its consumer arm stating the bids basically undervalued the business and its prospects. Unilever is behind brands like Emergen-C vitamin supplement, Sensodyne toothpaste, Panadol painkiller, and more. GSK has said that the organization will be listing the business in mid-2022 separately. It has issued its new financial assumption for the unit as well.
Unilever said in this matter that they have noted what GSK has said and it is not going to change their view on fundamental value. They are determined not to increase their offer above 50 billion pounds.
GSK responded through a spokesperson that they were trying their best to maximize the shareholder value. They also hope to do well in the consumer healthcare field where Pfizer holds a nearly 32% stake. They further said, ‘The Consumer Healthcare business has an exceptional portfolio and offers existing and prospective shareholders a highly attractive financial profile supporting investment and future returns.’
GSK has also rebuffed the overtures of Unilever last week. They said their bids were rejected for a reason and it was that they failed to apprehend the unit’s potential. they released a new prediction that showed the growth of the annual sales which were 4%-6% for the business. They made nearly 9.6 billion pounds in the sale last year over the medium term.
The estimate presented by GSK was more than their previous forecast wanting to defeat the consumer health market’s growth of nearly 4%.
The British drug-making company GSK further said they will be sharing more information about their strategy for the consumer brands unit on February 28th, 2022.
The event will be conducted after the fourth-quarter results of the company on February 9th. They will share more details about their future plans on that day. Unilever decided to not raise its bid after many analysts and investors criticized the offer. The shares of the Dove soap makers were also down by 8% on Monday as investors worry that there will be a negative impact on the company if they raised their bid.
It has come to light that GSK and Pfizer would start negotiating with Unilever’s boss Alan Jope if it were to increase its bid to over 60 billion pounds.
I am Darryl Broadhurst and i give investors an insight into the most recent news hitting the “Technology” sector in Wall Street. I have been an independent financial adviser for over 11 years in the city and in recent years turned my experience in finance and passion for journalism into a full time role. I perform analysis of Companies and publicizes valuable information for shareholder community.
