The statement from Unilever PLC (LON:ULVR) rejecting Kraft Heinz’s (NASDAQ:KHC) £115bn bid out of hand was short and to the point.
You had to scroll past the meat of the eight-paragraph announcement before it became apparent that the Anglo-Dutch consumer products giant was taking Kraft’s overtures very seriously – very, very seriously.
For the list of advisers – the bid defence team – at the end of the formal rebuttal announcement ran to 17 names. Morgan Stanley, UBS and Deutsche Bank are providing the investment banking heft required to repel this earnest suitor (or at least to wring the best price from the deal).
Centerview front and centre
A savvy appointment and top of the list was Centerview Partners, which was one of just two investment banks that advised on the Kraft Heinz merger in 2015 (the other was Lazard).
It was founded by former UBS dealmaker Blair Effron in 2006 who set up the business with Stephen Crawford, a former co-president of Morgan Stanley.
Here in London the team will be led by former UBS man Nick Reid, whose CV includes working on the unsuccessful defence of Cadbury, which was bought by Kraft in 2010 for £11.5bn.
Of course managing the message will be important as the rhetoric ramps up and the gloves come off.
Experienced campaigner
And Unilever has found just the man for the job in Andrew Grant, founder of Tulchan Communications, and a veteran of these sort of hostile skirmishes.
“I have experienced the drama of takeover bids, demergers, IPO’s, disposals and acquisitions. I have helped to launch strategic reviews, recovery plans and evolutionary strategies,” his biog says.
And selectively quoting here, it concludes: “Whilst each event has been unique in the detail and the characters, every time I have drawn on something that has gone before.”
Shares in Unilever rocketed 12% after it was revealed the Marmite maker had rejected a £115bn bid from acquisitive Kraft Heinz.
The American giant said it had tabled a “comprehensive proposal”, which was declined. It added: “We look forward to working to reach agreement on the terms of a transaction.”
Shares rocket
At 2pm, Unilever shares were changing hands for almost £37.50 - just below the offer price of £40 (US$50) in cash and stock tabled for the owner of Knorr Soup and Dove Soap.
"This fundamentally undervalues Unilever." the company told investors.
"Unilever rejected the proposal as it sees no merit, either financial or strategic, for Unilever's shareholders. Unilever does not see the basis for any further discussions."
The City thinks otherwise.
“While Unilever has declined the proposal, we note Kraft Heinz's backers 3G Capital and Warren Buffet's Berkshire Hathaway have a history of undertaking significant industrial combinations,” said City broker Liberum.
Slowing growth and competition from fleeter footed rivals has meant consolidation has been on the cards for some time.
Brexit and bargain buys
The weak pound makes this a great time to strike for opportunistic dollar earning businesses looking to go on a shopping spree on this side of the Atlantic.
Analysts said Cilit Bang maker Reckitt Benckiser (LON:RB.) could be the next big deal. The share price certainly priced in that expectation as it rose 3% to just over £71.
Reckitt is in the middle of an acquisition of its own having agreed to splash almost £14.5bn on the baby food maker Mead Johnson.
Meanwhile there have been a series for bids for UK companies from foreign rivals following the collapse of the pound in the wake of the Brexit vote.
They include SoftBank of Japan’s £24bn takeover of chipmaker ARM Holdings and Rupert Murdoch’s dart for the 39% of Sky he doesn’t own.
Billionaire backers
If Kraft-Heinz is successful in nabbing Unilever it would create a foods and household products colossus with a combined stock market value of nearly £200bn, revenues of £68bn and 210,000 staff.
Unilever is actually the larger of the two businesses, with 168,000 staff in 110 countries and revenues of £46bn.
The US company, while smaller, does have two of the world’s richest men backing it – the legendary investor Warren Buffett and the Brazilian Jorge Lemann.