19th Jan 2022 16:55
(Alliance News) - Unilever PLC on Wednesday said it will not lift its bid for GlaxoSmithKline PLC's consumer unit above the current GBP50 billion offer.
The FTSE 100-listed consumer goods firm said it has seen a set of financial assumptions on the unit, outlined by current owners GSK.
Unilever said the numbers do not "change our view on fundamental value".
"Accordingly, we will not increase our offer above GBP50 billion," Unilever added.
Unilever on Monday confirmed that it has an interest in acquiring the Consumer Healthcare business of GSK, believing that the unit would a be a "strong strategic fit" for the consumer goods maker's objectives.
On Saturday, GSK said that it had received three bids from Unilever, the latest being for GBP50 billion in cash and shares. The business was formed in August 2019 as a joint venture with Pfizer Inc, which holds a 32% interest, while GSK holds the remaining 68%.
All three proposals were rejected by the Brentford-based pharmaceutical group, on the grounds that they all undervalued the business and its future prospects. Glaxo has been under pressure to consider a sale, including from US hedge fund Elliott Management.
Unilever said that its interest in GSK's Consumer Health business follows an extensive process reviewing how the group can reposition its portfolio into higher growth categories. The business makes brands such as Aquafresh toothpaste and Panadol painkillers.
Unilever on Wednesday added it is "committed to maintaining strict financial discipline" and ensuring any acquisitions can create value for shareholders.
"Unilever also reiterates its commitment to continuing to improve the performance of its existing portfolio through its ongoing focus on operational excellence, its upcoming reorganisation and by rotating the portfolio to higher growth categories," the company added.
A large chunk of the GSK unit trades in the oral care and vitamins, minerals & supplements space, industries in which Unilever already has a presence.
GSK shares, while already lower, slipped further into the red just before markets in London closed. The stock ended down 2.1% at 1,666.40 pence each on Wednesday.
Unilever shares suffered a dramatic fall just before the closing bell, ending 0.6% lower at 3,495.55p. Shares were up 3.8% just before close.
By Eric Cunha; [email protected]
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