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Unilever shares fall after £50bn GSK bid is rejected

Unilever shares fall after £50bn GSK bid is rejected

Unilever, whose array of brands also include Dove soap, Sure deodorant and Radox, insisted the proposed deal would be a “strong strategic fit”.

The takeover would be one of the largest yet on the London market and one of biggest deals globally since the start of the pandemic.

But Unilever faces a battle to land the prize as GSK has already rejected the latest offer for the business, home to Panadol painkiller.

Unilever’s own investors appear unconvinced, with its share price tumbling seven per cent yesterday, wiping more than £8billion off its stock market value.

Jefferies analysts said in a note: “Initial feedback on the deal from investors over the weekend has been almost uniformly negative.”

GSK’s share price rose 4.1 per cent. In a stock market announcement yesterday, Unilever said it wanted to expand into “higher growth categories”. It added that any big-money takeover would be funded in part by selling “intrinsically lower growth brands and businesses”.

It added: “We believe that this would be an attractive and synergistic combination for the shareholders of Unilever, which would also deliver value and certainty for the shareholders of GSK and Pfizer.”

GSK has said that Unilever’s offer “fundamentally undervalued” the consumer healthcare division, in which US drugs company Pfizer owns a 32 per cent stake.

It added that it would stick to its plan of listing the division on the stock market this year.

However, reports say GSK and Pfizer would open negotiations with Unilever boss Alan Jope if it was ready to improve its bid to more than £60billion.

Unilever is said to have held talks with banks about additional financing.

GSK has been pursuing a separate listing of the consumer arm following pressure from investors to explore a shake-up of the company and focus on its pharmaceuticals business.

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