Unilever Shares Soar After Kraft Heinz Confirms £112BN Takeover Bid; Options Confirm Leak

Tyler Durden's picture

Unilever shares soared this morning after food conglomerate Kraft-Heinz, backed by Warren Buffett and Brazil's 3G, confirmed it made a £112bn takeover offer for Unilever, leading to a 11% surge in the shares of the London-listed Anglo-Dutch conglomerate, the biggest one day surge since 1987. Shares of Kraft Heinz rose over 4% premarket in New York.

In a statement issued shortly after the FT reported earlier on Friday that Kraft Heinz had made an approach to Unilever, Kraft said that Unilever declined its initial offer, but added "while Unilever has declined the proposal, we look forward to working to reach agreement on the terms of a transaction."

The U.S. food and beverage maker said it is uncertain that any further formal proposal will be made to Unilever or that an offer will be made at all. It also said the terms of any such transaction are uncertain.

With Unilever's market capitalization of £112bn, a potential takeover would be one of the largest in history. The company is the world’s fourth-largest consumer goods company by sales, with revenues last year of €52.7 billion. As the FT adds, "a deal would unite some of the biggest brands in the global consumer good industry, adding the likes of Dove and Knorr to the Kraft Heinz roster, which spans Philadelphia cream cheese, ketchup and Weight Watchers."

Following the news, Mondelez dropped 5.2% pre-market, Kellogg -2% and General Mills -0.9%, as a potential deal has dampened speculation that other packaged food companies could be targets for KHC.

In the statement just filed by Unilever, in which it recommends holders take no action, it announced that Kraft-Heinz had offered $50/share for the company.

As the takeover was first reported by the FT Alphaville blog, there was immediate speculation how widely it was leaked first. Sure enough, volume of bullish Unilever options rallied in the past two days. As Bloomberg points out, on Unilever’s U.S. ticker, 10,909 calls traded on Feb. 15, the most since 2011 and compared with 232 puts; 5,186 bullish contracts changed hands on Feb. 16 versus 31 bearish bets. March $45 and $40 calls were the most active on Feb. 15; March and May $45 calls were the most traded on Feb. 16.  On the Dutch ticker, call volume jumped to 24,649 on Feb. 16, the most since September and more than double put trades. March EU40 calls were the most traded on Feb. 16.

The SEC will be busy tracking down just who leaked what.

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VinceFostersGhost's picture

 

 

 

They threw in John Kerry's kayak......without telling him.....boy is he gonna be pissed!

New_Meat's picture

I'm wondering how this will affect John's second wife's first husband's trust fund value?  He's got a job as a "fellow" at Yale, so maybe he'll be able to buy a kayak out of his stipend.  We know he'd never let go the wind surfer or the fancy italian bike.

YouJustMadeTheList's picture

They'll be moving the corporate HQ to Antarctica.

JRobby's picture

More monopolistic consolidations.

Meanwhile: Over at the offices of "the regulators":

Stage direction: audio: (sound of crickets chirping)

"A few mal adjusted's with blood shot eyes serf the web, the remainder sleep at their desks."

Byte Me's picture

Meanwhile: Over at the offices of "the regulators":

We still have regulators? I thought they were extinct.

Who knew..?

BabaLooey's picture

WAIT!

Lurch Ketchup has his hands DIIIIIIIIIIIIIIIIIIIIRTY <smashleyjudd> IN ALL OF THIS - RIGHT?

Oh wait - it's Kerry. HE's on the left. No investigation.............

 

JRobby's picture

Processed crap foods and cleansers that give you cancer and destroy your endocrine and immune systems, YUM!!!!

YouJustMadeTheList's picture

I used to scream for ice cream. But now I just scream for no apparent reason.

The central planners's picture

Expect the new shampoo and conditioner made of ketchup and mayoneese.

junction's picture

So expect Buffett to demand massive job cuts at Unilever to finance this takeover.  Why doesn't Buffett just die?

ZippyBananaPants's picture

SEC tracking anyone down?

buzzsaw99's picture

this HAS to be THE top. it has to be.

with or without Kuroda, with or without Draghi, with or without Yellen, this is it.

gatorengineer's picture

Until it isnt.... Trump tosses out a tax plan that wont make it through congress, and Yellen Coo's due to X in europe, and its 23K dow by the fourth of July.

buzzsaw99's picture

Sell the house. Sell the car. Sell the kids. Find someone else. Forget it. I'm never coming back. Forget it... [/Lieutenant Richard M. Colby, Apocalypse Now ]

gatorengineer's picture

Dont get me wrong there will be / has to be a monumental collapse....  I just think full retard has a ways to run...

buzzsaw99's picture

lulz. full retard has just completed a triathalon.

Wee_littte_dogee's picture

Here comes all the BS on why this isn't anti-competitive... These guys are allowed to sling any kind of bullshit they like. There is NO way this can pass anti-trust approval or that it isn't anti-competitive. Warren Buffett is still alive?? Die already you POS and take Charlie with you!

buzzsaw99's picture

yeah, time for your dirt nap charlie.

Cardinal Fang's picture

Conglomerate....doesn't even come close to describing it

Lol

CorporateCongress's picture

Yeah more mergers and more globalization. Just what we need. One big fucking corp

silverer's picture

What corporations do once they gain influence is that they create barriers to entry. It's one reason you couldn't buy cheaper car insurance. You'd get the answer "We're not licensed to sell in your state". Capitalism is thwarted by barriers to entry, because it's not a free market. Government creates those barriers via regulation. Banning roadside sales of vegetables at farm stands brings more business back into the corporate controlled supermarkets, etc.. EPA regulations can make a startup a nightmare. Requiring expensive licenses, such as for a hair salon, is a barrier to entry. Check out the big California cities. Expensive business licenses abound. Taking down these barriers to entry makes the mega-corporations susceptible to competition, read: Capitalism. What the big corps want is total control of the markets. I'm hoping Trump works to unwind all that.

InternetToughGuy's picture

Yes to all of that. But instead of using the (Marxist) word "capitalism" I prefer "free enterprise". This avoids the false dichotomy.

gatorengineer's picture

This way you can get your pseudo food ration and have it permixed, with Dove soap, Old spice, and Charmin.  One stop, you eat it smell better, and take a health crap....

What they produce is not Food, nor does it contain much of anything grown in nature (as opposed to a chemical reactor).  That will be the next great awakening of the Sheeple....

buzzsaw99's picture

Wiki is calling the (2014-    ) M&A activity period the "Seventh Wave".

the other six did not end well.

Vardaman's picture

P&G hardest hit...

Whopper Goldberg's picture

Our Anglo -Dutch Unilever has declined the takeover by the Americunt Kraft-Heinz

JailBanksters's picture

Kraft does NOT make Food, it's Fake Food.

Most of Kraft Krap animals will not eat it.

silverer's picture

Cheez Whiz. Made with genuine sweet light crude.

Ballin D's picture

It's not fake food. It's very fake food.

PGR88's picture

Kraft products are already plastic, tasteless corporate shit.  They are merely conduits for starch, fat and fructose to be delivered to the sheep.

I can't imagine how much worse their crap will get when they take over another corporate giant.

Youri Carma's picture

Nestle CEO on Growth Outlook, Restructuring Plans
Feb 16, 2017 Bloomberg
https://www.youtube.com/watch?v=lbNOwmO3sSI

Nestle CEO: “Reduction of volume growth in the second half. That was a general trend of the industry”

“… also still in a deflationary environment”

Vageling's picture

Yeah... Not going to happen! Is this to outsmart Brexit? Fuck with a British-Dutch company? I think the Britons and the Dutch have their own views on this. Would like to see the anti-trust ACM do it's job.

sinbad2's picture

In the end there will be only one corporation. By takeovers and mergers you can increase profits to shareholders, by eliminating competition.