A number of Wall Street analysts quickly dismissed speculation that Procter & Gamble Co. would attempt to acquire certain businesses from Unilever.
This story first appeared in the June 2, 2011 issue of WWD. Subscribe Today.
The published reports that P&G was lining up a mega breakup bid for Unilever surfaced in a Daily Mail article on Wednesday. The article stated that the rumor ran amok on Tuesday, sending Unilever’s stock up 31 pence to 1,971 pence, or $32.50 at current exchange, on the London Stock Exchange. On Wednesday, the stock closed up 0.7 percent at 1,984.88, or $32.73. P&G closed down 0.9 percent at $66.40 on the New York Stock Exchange Wednesday.
P&G and Unilever declined to comment.
A possible bid would usher in a host of antitrust issues, said industry observers, as both companies have strong laundry, hair care and skin care business. For instance, Unilever’s beauty portfolio includes TRESemmé and VO5 in hair care, and in skin care, Dove. P&G’s megabrands include Pantene and Olay.
Unilever does offer a food business, but P&G has continued to divest food brands over the last two decades.
One analyst dismissed a possible acquisition as “too complex.” Deutsche Bank analyst Bill Schmitz brushed it off with more colorful language, saying, “This is the silliest rumor I’ve heard in some time.…It was delivered by a sprite riding a unicorn up from Atlantis on her way to the Emerald City. [P&G] would have to sell off tons of laundry, oral care, deodorant and skin care assets and regulators have already taken Unilever through the wringer by making them divest Sanex, VO5 and Rave.”
The Justice Department ordered the divestitures in connection with Unilever’s acquisition of Alberto-Culver Co.