Lord Myners, who was Financial Services Secretary under Gordon Brown, has lent his support to the campaign for tougher barriers to foreign takeovers.
In an article for the Sunday Telegraph, Myners called on the current government to toughen rules on the acquisition by overseas companies of the crown jewels of Britain’s corporate scene.
His opinion piece came in the wake of the £115bn bid approach for Unilever PLC (LON:ULVR) by Kraft Heinz, the American company that successfully pulled off a smash & grab of British confectionary company Cadbury in 2010.
“The UK’s takeover rules are the most permissive in the world. They do nothing to discourage the likes of Kraft Heinz seeking to buy businesses to turn a quick profit. Does the Government really believe this constant garage sale is good for the national economy and society at large?” Lord Myners asked in his newspaper piece.
With sterling having hit the skids since the EU referendum vote and interest rates at historically low levels, a lot of British companies are sitting ducks for overseas companies, in the view of Myners.
His views echo those of Paul Polman, chief executive of the beleaguered Anglo-Dutch consumer goods giant Unilever, who has called for the takeover code to have a few more obstacles to foreign takeovers in it.
Meanwhile, Unilever is said to be mulling the sale of its under-performing spreads business, which includes household names such as Flora and Bertolli.
Newspaper reports suggest that private equity groups have put a £6bn price tag on the division, and if the sale goers through Unilever could try to appease those shareholders who were annoyed at the peremptory rejection of the Kraft approach with a special dividend.
Others suggest that Polman could forget for a moment about his apparent distaste for foreign takeovers and launch a bid for US rival Colgate-Palmolive in order to bulk up some more.
Next month the owner of Ben & Jerry’s ice cream – another US company it acquired via takeover – is set to announce the results of a strategic review aimed at improving investor returns or saving Polman’s job, depending on how cynical you are.
The Guardian newspaper reports that a survey by the investment house Bernstein indicated City institutions that hold Unilever shares are fairly evenly split over the “aggressive rejection” of Kraft’s overtures, with around half believing the company should have held talks with the US company.
Given Kraft’s track record on promises it makes prior to takeovers – it had indicated prior to the takeover it would reverse a decision by Cadbury to close a factory in Bristol, and then went ahead and closed it once the takeover was complete – perhaps Unilever thought it was pointless sitting down to discuss Kraft’s plans for the company?